Hi as the title suggests. Can someone explain how would private money changer make money if the currency they are exchanging is experiencing a hyperinflation? Why would they do that business?
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If a government wants to manipulate their currency (usually to strengthen it) they can set an official exchange rate which has to be kept to. Similarly they can limit the amount citizens can sell of their currency. That might leave a rich Chinese person (this practice was quite noticeable up to the 80s) who wants to import foreign goods but has reached their quota. There is a limit on how many USD they can buy for their CNY and the officials rate makes the CNY too strong. Meanwhile an American (say) importer or tourist may want to buy CNY and can only do so through the government controlled bank at the official rate.
A broker can solve both problems at once so long as they either do it quietly or bribe the correct people. They buy USD from the American and swap it with the Chinese person at a price they are both happy with. Market correction in action.
During hyperinflation currency exchangers are more likely to minimise the risk of holding lots of useless currency by massively increasing their buy/sell spread.
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