Hyperinflation: Five Banknotes That Signaled Economic Catastrophe

By Tyler Rossi for CoinWeek …..

What is inflation? Basically, inflation is the rate, usually measured yearly, at which prices increase. When controlled by financial institutions and kept below 2% annually, inflation can actually help increase consumer demand and drive economic growth. However, if inflation starts to increase rapidly, money becomes worth significantly less. Central banks will also raise national interest rates to increase the “price” of money in an effort to combat inflation. As a result, consumers and companies will have to pay higher rates to borrow money.

Strong central banks generally have the tools to narrowly control the value of their currency. However, when there are significant shocks to either the global or a country’s domestic economy, inflation can outstrip all containment efforts. Once inflation hits 50% a month, economists re-label it as hyperinflation.

At this point, it is incredibly difficult to halt and will inevitably cause long-term economic damage. Over the past century, many countries have suffered from hyperinflation. And while some instances are more well-known than others, each shared similar traits – such as the production of banknotes with astronomically high denominations.

Hungary (1946)

Directly after World War II, Hungary earned the dubious accolade of having suffered through the worst case of hyperinflation in history.

In 1946, with prices doubling every 15.6 hours, the Hungarian Pengö underwent 13,600,000,000,000,000% monthly inflation, or 195% per day. First introduced after World War I to stabilize the economy and prevent further inflation, the Pengö was immediately threatened by the Great Depression. Hungary’s economy still had not completely stabilized by the time Hungarian leadership entered World War II as one of the Axis powers.

Hyperinflation: Five Banknotes That Signaled Economic Catastrophe

To help fund their war effort, the National Bank simply printed ever-increasing numbers of bills. This drove down the currency’s value until almost all coins disappeared from circulation. People hoarded all coins, even base metal denominations, as a store of wealth due to their metal value. Prices rose so dramatically that the government was eventually forced to issue the 100,000,000,000,000,000,000 (one hundred quintillion) B Pengö note in 1946. As the highest denomination bill ever printed, the government was forced to abbreviate the denomination with a “B”. The denomination “SZÁZMILLIÓ B.-PENGÖ”, an abbreviated form of százmillió billió Pengö (“one million billion Pengö”) is printed on both the obverse and the reverse. An interesting point is that the note is dated, not just with a year, but with a day, a month, and the year.

Eventually, as a measure to stop inflation and stabilize the economy, the Hungarian government re-introduced the Forint. Initially, the new Forint was worth 400,000,000,000,000,000,000,000,000,000 (four hundred octillion) Pengö. By doing so, the government instituted a stronger currency and reduced the value of a Pengö to 1/1,000th of a Forint.

Yugoslavia (1993)

From 1989 to 1990, the Federal Republic of Yugoslavia lived through a large economic recession that forced over 1,100 firms into bankruptcy and caused roughly 22% of the workforce to lose their jobs. This was quickly compounded by the violent civil war that started in 1991, during which the country’s various constituent republics fought for independence. By 1993, the economy was in shambles. The Yugoslav government continued printing massive quantities of bills, which counteracted its other price control efforts and proved ineffective in addressing the imbalance between supply and demand of everyday goods.

When this mismanagement was combined with wartime conditions, the Yugoslav Dinar began experiencing hyperinflation. With a monthly inflation rate of 313,000,000%, or 64.6% per day, civilians saw prices double every 1.4 days. At four orders of magnitude greater than the hyperinflation suffered by the Weimar Republic in Germany between the World Wars, this was the second-worst example of hyperinflation in history. Unable to strike coins of sufficient value, the government in Belgrade eventually printed a 500 billion Dinar note.

The situation quickly became so dire that per capita income dropped over 50%, and despite four consecutive devaluations of the currency, companies refused to accept Dinars and the German Deutsche Mark became the unofficial currency.

Peru (1990)

Described as the “Lost Decade”, the Peruvian economy stumbled through the 1980s. Inflation hovered between 23% and 48% during the last months of the Alan García administration until Alberto Fujimori took office in August 1990. In an attempt to reverse the economic damage inflicted by the García administration, Fujimori instituted a policy of price reduction, lower interest rates, privatization, and increasing trade. While these are generally viewed as beneficial policies in a vacuum, when combined with the existing economic situation they resulted in “el Fujishock”.

Hyperinflation: Five Banknotes That Signaled Economic Catastrophe

Between 1990 and 1992, Peru’s inflation increased at an average monthly rate of 396.98%, or a daily rate of 5%. On average, prices doubled almost every two weeks. To combat this inflation of the Inti, the government implemented a massive package of fiscal reforms that slowly stabilized the economy. Included in this was the demonetarization of the Inti and its replacement with the New Sol at a rate of 1 Sol to 1,000,000 Inti. During August, in the depths of Peru’s economic panic, the largest denomination note printed was the 5 million Inti. The bill, which circulated as legal tender until 1991, depicts the Peruvian geographer and scientist Antonio Raimondi on the obverse and a native American comforting Raimondi on the reverse.

China (1949)

During the 1930s and ’40s, China was consumed by internal fighting as Mao Zedong’s communist and Chiang Kai-shek’s nationalist forces fought a brutal civil war for control over the national government. This civil war, the Great Depression, the re-monetization of silver in the United States, and the later Japanese occupation of China all resulted in the complete “destruction of the Chinese monetary system” (Ebeling, 2010).

In 1948, the government demonized the Yuan and instituted a new Yuan at a rate of 1 old Yuan to 1,000,000 new Yuan. In the short term, this demonetization was a success, but, due to the rapid printing of new Yuan, the currency once again suffered from inflation. The money supply ballooned from 296.82 billion new Yuan in August 1948 to 5,161,240 billion new Yuan in April 1949. Not only did prices skyrocket, but the foreign-exchange market value of the new Yuan plummeted to such an extent that the Xinjiang Provincial Bank issued a 6,000,000,000 new Yuan note in 1949, which was equal to 10,000 Gold Yuan.

Since it destroyed the middle class and forced most of the rural farmers into poverty, this inflation was so damaging to the national economy that it played a major part in the defeat of Chiang Kai-shek’s nationalist forces.

Zimbabwe (2008)

In one of the most recent examples of hyperinflation, Zimbabwe’s economy began spiraling in 2006 when the government printed more than 81 trillion dollars to pay off a loan to the International Monetary Fund and to pay public salaries. This, together with a high national debt, a significant lack of confidence in the national government, and a series of price controls, resulted in a peak monthly inflation rate of over 79,600,000,000%, or 98% daily in November 2008. According to one businessman, “you’d have to pay for your coffee before you drank it because if you waited the cost would rise within minutes” (Nurse, 2016).

This bout of hyperinflation led to a series of serious compounding effects. Most importantly, people could not afford basic goods and by 2008, a single loaf of bread cost an average of two billion Zimbabwean dollars. Credit became unavailable, and with money quickly becoming worthless, the country shifted to a barter economy. As in Yugoslavia, companies switched from the Zimbabwe Dollar to foreign currencies, usually the US Dollar.

On January 16, 2008, the Central Bank released the famous 10, 20, 50, and 100 trillion dollar denominations.

Eventually, by using the US Dollar, establishing a multi-currency system in February 2009, and devaluing the currency by a factor of 10^12 (removing 12 zeros from the denomination), the government slowly halted hyperinflation and began rebuilding trust in the economic system. The People were able to exchange the Z $100 trillion notes until April 2016 (though they were only worth $0.40 USD).

With the exception of the Chinese 6 billion Yuan note, most of these bills are extremely common (due to being printed in such high volumes) and do not command high premiums. In Mint State, a 2008 Z $100 trillion bill can be purchased at auction for $50 to $75 USD; a 1949 6 billion Yuan note is worth upwards of $3,000 USD; a 1991 5 million Peruvian Inti bill is worth $75 to $100 USD; the 1993 Yugoslavian 500 billion Dinar is worth $50 to $75 USD; and a 1946 one million billion B-Pengö note is worth $30 to $50 USD.

Happy collecting!

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Nurse (2016) – https://www.cnn.com/2016/05/06/africa/zimbabwe-trillion-dollar-note/index.html

Ebeling (2010) – https://fee.org/articles/the-great-chinese-inflation/

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About the Author

Tyler Rossi is currently a graduate student at Brandeis University’s Heller School of Social Policy and Management and studies Sustainable International Development and Conflict Resolution. Before graduating from American University in Washington D.C., he worked for Save the Children creating and running international development projects. Recently, Tyler returned to the US from living abroad in the Republic of North Macedonia, where he served as a Peace Corps volunteer for three years. Tyler is an avid numismatist and for over a decade has cultivated a deep interest in pre-modern and ancient coinage from around the world. He is a member of the American Numismatic Association (ANA).


  1. Minor quibble from a former math teacher: Lopping 12 zeros off a currency isn’t reduction by a factor of 12 but rather a factor of 10^12; i.e. a trillion.

    • RJ. You are also correct. However, the B-pengo was itself worth 1,000,000,000,000 Pengo and the SZÁZMILLIÓ B.-PENGÖ was worth 100,000,000 B-pengo. So the bill was worth 100,000,000,000,000,000,000 or 100 quintillion. That was not clear in the article, my apologies.

      It should have stated “Prices rose so dramatically that the government was eventually forced to issue the 100,000,000,000,000,000,000 (one hundred quintillion) B Pengö note in 1946.” NOT “Prices rose so dramatically that the government was eventually forced to issue the 100,000,000,000,000,000,000 (one hundred quintillion) Pengö note in 1946.”

      My apologies.

  2. Dear Mr. Rossi:

    Great article. As far as the errors go, carrying around this many “0”s is tricky–that’s why scientists use “scientific notation” – as Clockwork Squirrell (properly spelled with only one “l” by the way?) points out implicitly.

    But very well done–I learned a lot. Thank you!

    P.S. I ended up here because I was motivated to research by Episode Two of Daniel Yergin and Joseph Stanislaw’s great documentary “Commanding Heights” (Ep.2 = “The Agony of Reform”). This deals among other things with the Bolivian hyperinflation of 1984-85. – SPP


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