What characterizes hyperinflation?

Hyperinflation is characterized by a dramatic and excessive increase in prices, often exceeding 50% on a monthly basis. This rapid inflation results in a severe loss of currency value, leading to a situation where consumers lose confidence in the currency, and the prices of goods and services escalate uncontrollably.

In a hyperinflationary environment, money becomes less useful as a store of value because its purchasing power diminishes swiftly. This can lead to various economic challenges, such as reluctance to hold cash, increased use of barter, and ultimately, the adoption of foreign currencies as a means of transaction. Thus, the defining feature of hyperinflation is the unprecedented spike in prices, setting it apart from scenarios where prices might be stable, gradually increasing, or depreciating over a more extended period.