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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Short answer is a lot of the effects are related to confidence, or lack thereof, in a currency. changing the currency in question and using a new one (especially one thats backed by outside agency or currency) can break the cycle somewhat by restoring confidence in the currency.
however, your right in that this doesn’t solve any underlying issues that were driving inflation in the first place, so ON ITS OWN, its just a band aid or a convenience of taking all the zeros off the notes. However, just like a band aid, it can give you some breathing space to actually enact those extra reforms.
normally, you will find this new currencies are part of a wider package, rather than the sole element being changed.
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