Paper money of the Hungarian pengő

Paper money usually meant banknotes, which were issued (either in fact or in name) by the Hungarian National Bank.

The aim of the National Bank was to quickly supply the territories over which Hungary gained control under the First and Second Vienna Awards with low denomination money.

After the war the new democratic government suffered from serious lack of money, so it ordered the national bank to manufacture banknotes quickly and cheaply.

In December 1945, the government tried (and failed) to bring inflation under control by a one-off capital levy.

Later the 100,000 pengő note was issued again in different colors – this banknote and higher denominations did not fall under the capital levy.

Although there were plans to issue 10 billion (1010) pengő notes (similar in design to the 1946-version 10 Ft note), denominations higher than one billion were renamed milpengő (which stands for million pengő) and the indicated value was reduced by a factor of one million.

The aim was to ease everyday money handling and accounting as well as to reuse the designs of earlier banknotes with little changes.

This naming scheme and reuse of the designs is the reason for the cyclic pattern in the hyperinflation pengő notes.

The cycle was 6 digit, meaning that notes with the same number before the denomination (e.g. 10,000 pengő, 10,000 milpengő, 10,000, b.-pengő) had the same design, though printed in a different color.

In 1944, during the Soviet occupation of Hungary, the Red Army issued paper money without cover in the areas under its control.