At its worst, Hungary's 1946 inflation doubled prices every 15 hours.
Germany's 1923 hyperinflation is the famous one, but Hungary's in 1946 was far worse. At its peak, prices doubled in about 15 hours. The central bank printed a note for 100 quintillion pengő. When the forint replaced it, 29 zeros were struck off in a single stroke.
The pengő was launched on 1 January 1927 to replace the inflation-battered korona, as part of a stabilisation programme backed by a League of Nations loan. Its name means 'ringing', an old word for silver coins that rang when struck, chosen to suggest solidity. For a while it worked: until the Great Depression, the pengő was the most stable currency in the region.
The Second World War destroyed that. The national bank came under government control, money was printed to meet the budget, and in the war's final stages the Szálasi government issued notes with no backing at all, while the occupying Soviet army issued its own. Afterwards, with the economy wrecked and heavy reparations to pay, the government deliberately used inflation as a kind of tax to raise revenue and restart production.
It spiralled out of control. A 75 per cent capital levy in December 1945 did not stop it. New units, the milpengő (a million pengő) and then the b.-pengő (a trillion), were introduced so banknote designs could be reused with a new colour. In January 1946 the government created the adópengő, a 'tax pengő' meant to be indexed against inflation, but it too collapsed. The last pengő note, issued in July 1946, was for 100 million b.-pengő, or 100 quintillion pengő, and was worth about 20 US cents.
On 1 August 1946 the forint replaced it at a rate of 400 octillion pengő to one: a four followed by 29 zeros. The entire stock of pengő notes in circulation was worth a fraction of a single fillér, so the bank could start again from scratch. The episode far exceeded the German hyperinflation and remains the most extreme on record.
Source: Wikipedia — Hungarian pengő · Text summarised from Wikipedia (CC BY-SA 4.0)
