Hyperinflation is an extreme and typically accelerating form of inflation that rapidly diminishes the real value of a local currency. As prices for goods surge, the purchasing power of money collapses, forcing individuals to abandon the local currency in favor of more stable foreign currencies.
To combat hyperinflation, governments may implement capital controls or pursue dollarization, though these strategies often carry significant social and economic costs. Ineffective attempts to address the underlying structural issues can lead to prolonged periods of economic instability, making the recovery process complex and difficult to manage.