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?
In: 712
It does not. A new currency is only as a logistic solution (as the bigger the number, the more new money you have to print anyway, and the more space it takes otherwise, phisically) and a psychological one (smaller numbers are easier to handle and visualize. Besides, if you have to devaluate as a shock measure to stop inflation from rising even more, it is far more politically friendly to create a new currency at 1:x ratio, than lowering salaries, if its legal at all, or stagnating them but not prices which is mentally draining)
If you want to stop inflation, you need to solve the underlying cause and generally when there are large amounts of it, it is caused by devaluation, which usually arises from money printing, that by itself is used to water down debts and finance public spending. Most countries solved that already, mostly, by independizing the central bank
Source: Im argentinian, I was born at the tail of hyperinflation and im living hyperinflation currently
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