Hungarian Hyperinflation (1945-46)

The Hungarian hyperinflation of 1945 to 1946 remains the most extreme episode of currency debasement ever recorded, with prices in Hungary's pengo doubling roughly every fifteen hours at its peak in July 1946 and the currency losing 90 percent of its value in about four days. By that point the annualized inflation rate had reached an estimated 2.9 times ten to the 177th percent, banknotes were issued in denominations as large as one hundred million billion pengo, and an intermediate currency called the adopengo was introduced in a failed attempt at stabilization. The crisis, rooted in wartime destruction, Soviet reparations demands and the collapse of production and tax revenue in the immediate postwar period, ended on 1 August 1946 when Hungary's government introduced the forint at an exchange rate of four hundred octillion pengo to one forint, dropping twenty-nine zeroes from the old currency in a single stroke. The episode surpasses even the Weimar Republic's and Zimbabwe's hyperinflations in severity and is the standard reference case in monetary economics for the mathematics of runaway currency debasement.