Photo: ByRussia45 · CC BY-SA 4.0
1946
Hungary printed a 100 quintillion pengő banknote during the worst inflation ever recorded.
5 min readLast updated
The short answer
Yes. Hungary's 1945 to 1946 hyperinflation is the most extreme on record. In July 1946 prices doubled roughly every fifteen hours, and a 100 quintillion pengő note entered circulation.
Why it's true
Hungary ended World War Two with much of its industry, transport and capital city damaged, and with heavy reparations to pay. The government covered its costs by printing money. With little to buy and ever more banknotes chasing it, prices began rising faster and faster, until people tried to spend wages the moment they received them.
At the peak in July 1946, the monthly inflation rate was measured in the quadrillions of percent. Economists Steve Hanke and Nicholas Krus, who compiled a widely cited table of hyperinflations, list Hungary's as the worst, with prices doubling in about fifteen hours. The highest note actually circulated was 100 million b.-pengő, which equals 100 quintillion pengő, a 1 followed by twenty zeros.
Even larger notes were printed but never issued, because the currency was replaced first.
By the numbers
15 hrs
Approximate price doubling time, July 1946
10^20
Pengő value of the largest note issued
1 Aug 1946
Forint replaces the pengő
The backstory
As the pengő collapsed, the government tried several fixes. It introduced the milpengő, worth a million pengő, and later the b.-pengő, worth a trillion pengő in the long scale used in Hungary. It also created a tax pengő, adjusted daily to track prices, which for a time became the more useful unit for payments and savings.
The crisis ended on 1 August 1946 with a new currency, the forint. One forint was set equal to 400 octillion pengő, a number so large that the old money was effectively wiped out. With tighter budgets and backing from gold reserves returned from abroad, the forint stabilised quickly and is still Hungary's currency.
Worth remembering
- Hungary's 1946 hyperinflation is the fastest on record.
- Prices doubled about every fifteen hours at the peak.
- The forint replaced the pengő on 1 August 1946 and is still in use.
In context
Hyperinflations are rare but memorable. Germany's in 1923, Zimbabwe's in 2008 and Venezuela's in the late 2010s all became famous for wheelbarrows of cash and banknotes with long strings of zeros. Hungary's stands out because of its sheer speed, which is why it tops the tables economists use to compare these episodes.
What makes these crises so hard to stop is expectation. Once people believe money will be worth less tomorrow, they spend it today, and that rush to spend pushes prices up even faster. Ending hyperinflation usually requires a new currency and a believable promise to stop printing.
A closer look
Living with collapsing money
When money loses value by the hour, ordinary life changes. Workers were paid often and rushed to spend. Shops raised prices during the day. People turned to barter, foreign currency or goods like food and cigarettes that kept their worth better than paper.
The tax pengő was an attempt to give people something steadier. Its value was announced each day based on prices, so a sum held in tax pengő kept more of its real value than ordinary banknotes.
Counting all those zeros
Hungary used the long scale for big numbers, in which a billion means a million million. That is why its b.-pengő, from billió, was worth a trillion pengő in English short scale terms. It also explains why translations of these note values often look confusing.
Whichever scale you use, the result is the same: the pengő lost so much value that the replacement rate needed twenty nine zeros.
Why the forint worked
The new forint was backed by a credible plan. The government cut spending, raised revenue and limited money printing, and gold reserves returned from abroad added confidence.
Within weeks, prices steadied and shops refilled, showing how quickly trust can return when people believe a currency will hold its value.
Related facts
Huge numbers on banknotes are not always about inflation a $100,000 US note never meant for spending.
Another story about changing a currency the euro existed before its cash.
The same era saw a new world monetary system how 44 countries redesigned postwar money.
A far calmer currency change Britain's switch from 240 pennies to 100.
Key terms
- Hyperinflation
- Extremely fast inflation, commonly defined as prices rising over fifty percent in a month.
- Denomination
- The face value printed on a banknote or coin.
- Redenomination
- Replacing a currency with a new one by removing zeros at a fixed rate.
Myth vs reality
Myth
Zimbabwe's hyperinflation in 2008 was the worst ever.
Reality
Zimbabwe's was severe, but Hungary's in 1946 had a faster peak rate and holds the record.
People also ask
What is hyperinflation?
Hyperinflation is extremely rapid inflation, often defined as prices rising more than fifty percent in a month. Money loses value so quickly that people struggle to use it at all.
How fast did prices rise in Hungary?
At the peak in July 1946, prices doubled roughly every fifteen hours. That means something costing one unit in the morning could cost about two by nightfall of the next day.
What was the largest Hungarian banknote?
The largest issued note was 100 million b.-pengő, equal to 100 quintillion pengő. A note ten times larger was printed but never put into circulation.
What caused Hungary's hyperinflation?
War damage, reparations, shortages and heavy money printing to cover government spending. When people expect money to lose value, they spend it fast, which makes prices rise even faster.
How did Hungary stop it?
On 1 August 1946 it introduced the forint at a rate of 400 octillion pengő per forint, together with stricter spending and gold backing. The new currency held its value.
