5 and 10 forints coins will be withdrawn, HUF 50-100,000 banknotes will be issued in Hungary?
Will the Hungarian National Bank withdraw the lowest forint coins because it is no longer worth producing them? Will they introduce HUF 50,000 and 100,000 banknotes due to the high inflation? Here are the answers.
2008 marked a change concerning the history of the Hungarian national currency, the forint. The National Bank of Hungary (MNB) decided to withdraw the lowest coins from circulation. As a result, you could no longer use the 1 and 2-forint coins from 1 March 2008. Pénzcentrum now asked the national bank whether that will happen with the 5 and 10-forint coins as 16 years have passed since that withdrawal, and inflation hit Hungary hard in the pas few months.
The national bank decided 16 years ago to withdraw the lowest forint coins because it was no longer worth producing them. The production costs reached 2-6 forints then. Furthermore, the national bank decided to change the 200-forint banknotes to coins because of the inflation in 2008. The measure was implemented on 15 November 2009.
Hungary saw an incredibly high inflation rate in 2022-2023. For months, inflation in the country was the highest in the European Union. For example, in the case of several food products, the annual inflation reached even 100%.
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New 50,000 and 100,000-forint banknotes on the horizon?
In 2008, the national bank withdrew coins because they were no longer in everyday use. People got them after shopping but did not use them because they could not buy anything with them. Therefore, the national bank had to produce 1 million pieces to substitute them each day.
Now, however, the national bank’s data show Hungarians use the 5 and 10-forints coins in the shopping process. Therefore, they do not plan to withdraw them from circulation.
Interestingly, the national bank told Pénzcentrum that they spent HUF 7.4 billion (EUR 19.27 million) on producing paper money and HUF 4.3 billion (EUR 11.2 million) on making coins.
Based on the IMF’s so-called D-metric method, 5 forint-coins could have been withdrawn from circulation, but the national bank does not want to do so. However, also based on the recommendations of the IMF, the national bank could introduce HUF 50,000 and even HUF 100,000 banknotes because of the high inflation in the last few years. Due to security and political reasons, however, they will probably not do so.