The recent experiences of certain economies, such as Argentina and Turkey, show how quickly a currency can unravel through hyperinflation. At the same time, the way these countries have handled hyperinflation has left other economies with practical behaviours to follow to safeguard wealth.
What is hyperinflation exactly? I find the word ‘inflation’ a little scary, especially since I have seen how it can impact the price of a trolley of grocers. I remember my grandfather used to joke that he should put a chair in front of the supermarket shelves so that he can watch the prices go up. He was talking about inflation.
But ‘hyperinflation’? Just the name makes it sound like something which warrants our attention. The Corporate Finance Institute gives a good definition: “In economics, hyperinflation is used to describe situations where the prices of all goods and services rise uncontrollably over a defined time period. In other words, hyperinflation is extremely rapid inflation,” says the Corporate Finance Institute.
Economists typically bookmark hyperinflation as 50 per cent price growth in a single month. This is an extraordinary pace which pushes societies to abandon their own money. “Hyperinflation begins in the month inflation first exceeds 50 per cent per month,” says Stanley Fischer.
Here are some interesting observations of the financial landscape of countries where inflation rose at alarming speed. Specifically, they show how the citizens and governments responded in response.
Argentina
Argentina’s ordeal may be the world’s most closely watched laboratory. After years of monetised deficits and tight capital controls, inflation in the country rose past 200 per cent year-on-year in 2023.
Under the leadership of President Javier Milei, a brutal stabilisation has seen monthly inflation sink to low single digits in 2025. Annual inflation slowed to 39 to 37 percent by June-July, the lowest since 2020.
However, even after this recent progress, Argentina illustrates how citizens protect wealth when they don’t trust local money.
Reuters reported the state is trying to coax into the open an estimated $271 billion in physical US dollars stashed in mattresses. ‘Dollars under the mattress’ has become a survival strategy in Buenos Aires as a result of mistrust in the local currency.
Turkey
Inflation in Turkey peaked at around 75 percent in May 2024. This demanded a policy reset which took interest rates sharply higher to fight inflation. Disinflation followed. By mid-2025, annual CPI had more than halved to roughly 35 percent, and the central bank laid out interim targets toward 24 percent at end-2025 and 16 percent at end-2026.
Here, the focus on change was put down to policy. The bank’s message in response to the inflation has been plain: policy credibility, not wishful thinking, is the anchor.
Yet the Turkish case also shows how quickly policy can pivot and how sensitive currencies are to politics.
Venezuela
Beyond these two, the playbook repeats with local variations. Venezuela endured four straight years of six-digit inflation at one point, ‘reaching a heady 130,000%,’ as Reuters put it. Draconian credit restrictions and a steadier exchange rate cooled annual inflation to about 50 percent in 2024. This was the country’s lowest in 12 years, according to President Nicolás Maduro. The risk remains that any renewed currency slippage could reignite prices.
Lebanon
Lebanon’s lira lost over 98 percent of its value through early 2024 and annual inflation hit 221 per cent in 2023. A combination of informal dollarisation and exchange-rate moves has since dragged inflation down into double digits in 2025, but the underlying lesson, credibility lost is brutally hard to regain, still governs daily life. The IMF notes ‘some progress’ on reforms, while stressing the need for external support and deeper fixes.
Zimbabwe
Zimbabwe, long synonymous with hyperinflation, scrapped a failing currency in 2009. It reintroduced one in 2019, and launched yet another, the gold-linked ZiG, in April 2024.
By April 2025, annual inflation in local-currency terms was reported at around 86 per cent, and reportage from the ground has chronicled widening gaps between official and street rates and consumers retreating to dollar cash.
Common Truths About Safeguarding Wealth
Across these cases sit common truths about safeguarding wealth when currencies wobble.
Hard-currency hedges dominate behaviour
First, hard-currency hedges dominate behaviour. Argentines hoard dollar bills; Lebanese shopkeepers price in dollars; Zimbabwe’s informal economy runs on US notes.
Households re-dollarise themselves when the state won’t.
Policy credibility matters
Second, policy credibility matters more than any single instrument. Turkey’s rapid disinflation followed a visible turn to tighter money and clearer targets. Venezuela’s improvement came from throttling credit growth and steadying the exchange rate. This was painful medicine with social costs but effective at stopping the immediate spiral.
Old tools can become valuable
Third, both markets and savers are turning back to traditional tools. Inflation-linked bonds can be costly for governments, but they help reduce risk by replacing foreign-currency debt and allowing longer repayment periods, according to the World Bank and IMF.
For households and pensions, investing in real assets or inflation-linked securities can help protect against price rises. Even gold can help hedge against inflation, though its effectiveness changes depending on economic conditions.
Capital controls come at a cost
Fourth, capital controls come at a cost. Argentina’s long-standing ‘cepo’ created a divide between official and parallel currency markets, effectively taxed exporters, and encouraged people to hoard dollars at home. Removing these controls can be disruptive, yet the May 2025 alignment of exchange rates following liberalisation showed how quickly market distortions can disappear when prices are allowed to adjust freely.
The reasoning behind these strategies is straightforward. People want to protect the value of their money for the future. If a pension, school fee, or medical bill must be paid in dollars, they save in dollars. If a local investment promises 30% but inflation is 80%, they won’t take the risk. And if they don’t trust the system, they keep money they can physically hold, under the mattress, in a safe, or in an overseas account.
For policymakers, these examples are a clear warning: timing and communication matter. Good tools include controlling money supply faster than prices rise, keeping government spending under control, and having clear, predictable exchange-rate rules.
Strong, reliable institutions, like independent statistics, limits on central bank funding, and legal protections for property, are also essential. Without them, even smart economic policies may fail to win trust.
For households and investors, the lesson is practical. Keep some savings in stable foreign currencies when local policies are shaky. Use short-term or inflation-protected investments if returns are uncertain. Protect yourself from currency risk, and diversify investments across countries so one government’s mistakes don’t destroy your finances. Liquidity is important too: in a crisis, cash or easily sold assets are more useful than investments that only look good on paper.
In the end, money is really just trust you can hold. When trust falls, people find ways to protect themselves: using dollars, focusing on short-term plans, buying real assets, or moving money abroad. The stories of Argentina, Turkey, and others show both policy errors and how people adapt. The global lesson is simple: protect your wealth by not depending on a single currency, promise, or plan.
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