After reading this, I wonder "How can a government stop hyperinflation?"
What can other governments do to help?
And for completeness, How do governments keep currency stability?
Politics Stack Exchange is a question and answer site for people interested in governments, policies, and political processes. It only takes a minute to sign up.Sign up to join this community
Runaway or hyperinflation occurs when there is a lot more money than there are goods at current prices. In theory, you could fix this two ways.
First, you could flood the economy with goods, reducing the monetary pressures. I don't know that anyone has really tried that against hyperinflation, as the amount of goods required would be tremendous.
Second and more commonly, you reduce the money supply or at least stop it from growing. This often involves replacing the existing, near valueless, currency with a new currency. So if it takes a thousand bills to make a reasonable purchase, you exchange one new bill for a thousand of the old. The important part is that people and markets need to be confident that the new currency won't also be overprinted.
In practice, hyperinflation is generally triggered by a shortage of goods. The shortage causes increasing prices. The government attempts to overcome this by printing more currency, which is the exact wrong thing to do. Because the shortage is still there, the government can never catch up. They provide more bills. People with more bills bid up prices. Still a shortage. The government provides more bills. Prices increase. Still a shortage.
The essential problem is that more money doesn't make more goods. So printing money to fix a shortage in goods is much like a dog chasing its tail. The faster it goes, the faster its target recedes. Only worse, since the dog stays the same size. Under hyperinflation, an economy shrinks.
Ideally, the first thing to fix is the shortage in goods. Then a stable currency can be created. If the government can't do that, then the problem gets worse before it gets better. In the early stages of moving from hyperinflation to normal growth, already bad unemployment increases more.
The two things that external governments can do are to provide more goods to address the original shortage and to help restore confidence in the currency. Possibly by accepting payment for the goods in the currency and then holding it. Another alternative would be for more trusted foreign central banks to manage the money supply. Of course, most countries don't want to surrender control of their money supply in that way.
To avoid hyperinflation from starting, countries need to limit their currency growth to match production growth. And maintain an environment in which production is stable or growing. If production does fall, the government has to allow a recession rather than trying to cover it up by overprinting currency.
If governments want to control Inflation, hyper or otherwise, they need to reduce the money supply.