What is Hyperinflation ?

  • Hyperinflation is a situation where the price increases are too sharp.  
  • Hyperinflation often occurs when there is a large increase in the money supply, which is  not supported by growth  in Gross Domestic Product (GDP).  
  • Such a situation results  in an imbalance in the supply and demand for the money.  In this this remains  unchecked;  it results into sharp increase in prices and depreciation of the domestic  currency.