Apparently, every time a currency falls victim to hyper inflation, sooner or later the country is gonna introduce a new currency to solve the problem.
But how does that help? If let’s say the us dollar lost 90% of it’s value every day, and you introduced a new currency, one of which is equal to 5 us dollars, wouldn’t that new currency, as it’s value is bound to the dollar, instantly lose 90% of it’s value every day as well?
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You have cause and effect reversed.
The country (with the hyper inflating currency) first has to stop the hyper inflation. Only if that is achieved, can they then redenominate their currency or issue new currency with an exchange rate for the old currency.
And no, I’m not aware of any examples where a country actually pegged a new currency’s value to that of a hyperinflated currency. Most likely they would have established that as the value to start, but not peg it, so in case the value of either currency changes then what changes is the exchange rate, not the value of the other currency.
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