The pengő was the currency of Hungary between 1 January 1927, when it replaced the korona, and 31 July 1946, when it was replaced by the forint. The pengő was subdivided into 100 fillér. Although the introduction of the pengő was part of a post-World War I stabilisation program, the currency survived for only 20 years and experienced the most serious case of hyperinflation ever recorded.

The Kingdom of Hungary, referred to retrospectively as the Regency and the Horthy era, existed as a country from 1920 to 1946 under the rule of Miklós Horthy, Regent of Hungary, who officially represented the Hungarian monarchy. In reality there was no king, and attempts by King Charles IV to return to the throne shortly before his death were prevented by Horthy. Hungary under Horthy was characterized by its conservative, nationalist, and fiercely anti-communist character. The government was based on an unstable alliance of conservatives and right-wingers. Foreign policy was characterized by revisionism — the total or partial revision of the Treaty of Trianon, which had seen Hungary lose over 70% of its historic territory along with over three million Hungarians, who mostly lived in the border territories outside the new borders of the kingdom, in the Kingdom of Romania and the newly created states of Czechoslovakia and the Kingdom of Serbs, Croats and Slovenes. Republican Austria, the successor of the former other half of the dual monarchy also received some minor territory from Hungary. Thus the post-1918 Kingdom can be described as a rump state. Hungary's interwar politics were dominated by a focus on the territorial losses suffered from this treaty, with the resentment continuing until the present.