how does a country adjust their currency for inflation?

Question

If inflation is roughly 2% per year, wouldn’t it eventually devalue like the Zimbabwean dollar?

In: Economics

Answer 1

Printing money **IS** inflation. The problem with Zimbabwe was that they printed money WAY faster than their economy did, causing massive price increases. Most countries are still inflating their currency and forcing prices to rise, but at a much slower rate, which is a lot easier to adapt to, although it still devalues any savings or debts being held, which can be a problem.