Hyperinflation

In trading, hyperinflation can have a significant impact on markets, as it can cause a severe devaluation of the affected currency. This can make imports more expensive and increase the price of domestically produced goods, which can lead to a rise in inflation in other countries as well. The reasons of the inflation could be:

• Excessive government spending

• Large increase in the money supply

• Loss of confidence in the government or central bank

• Political instability

To protect against the impact of hyperinflation, traders may choose to invest in assets that are less affected by inflation, such as real estate, gold, cryptocurrencies or commodities.