Hyperinflation

Definition - What does Hyperinflation mean?

Hyperinflation refers to a period of rapid inflation in a nation’s currency. Hyperinflation can quickly erode the purchasing power of a nation’s currency, thereby forcing the citizens to look for alternative currencies. Hyperinflation can be extremely damaging to a nation’s economy and may result in a currency replacement.

ForexDictionary explains Hyperinflation

Hyperinflation is an extreme case of inflationary monetary policies reaching a critical mass, resulting in the country having to print more and more money to meet its obligations. There have been many historical examples of hyperinflation, including the German hyperinflation in the 1920s due to the heavy reparation payments. Hyperinflation was also common in the 1940s and 50s as nations adjusted to the idea of fiat currencies and struggled with debts from the second World War. Since then, hyperinflation has been less common, but nations like Zimbabwe, Romania and Bulgaria have experienced hyperinflation in recent memory.

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