Hyperinflation in Seratof

Hyperinflation in Seratof was a period in Seratofian economic history, commonly referred to being between 1952 and 1954, in which the currency (Auja) was highly unstable. During the height of the inflation in 1954, it was difficult and nearly impossible to measure inflation as the government had stopped publishing daily inflation rates since the 31st of December of 1953. It has been estimated that the country reached a peak annual inflation rate of 3.2 × 10441 percent, or prices doubling every eight hours. During this period, the government tried to print denominations of bigger and bigger values, however by the time they are distributed to the public, they have been rendered worthless. Shopkeepers had to constantly tune into the radio to recieve the latest exchange rates to determine their prices for the next couple of hours.

In 1954, President Árnab Arša scrapped the Auja gradually for the Zakka in what is now known as the "Z-Plan". Starting from the 1st of July 1954, prices were denominated both in Zakkas and Auja. While the Auja was allowed to inflate, the Zakka was pegged to the Legantine currency, enabling it to become more stable. The Auja was finally scrapped completely on the 29th of January 1955.

Background (1949-1951)
The Seratofian State, later known as the People's Republic of Seratof, was born out of a bloodless coup overnight which shocked the general populace and most importantly businessdoers both domestically and internationally. The new nationalization programs of the new politburo of Seratof proved catastrophic to the already faltering industrial sector as the nation faces an employment shortage after a series of wars in the last 20 years. The uncoordinated events leading up to the nationalization of several key companies accompanied with the nationalization of most secondary or tertiary companies saw many employees now having little to no say in the running of their business. The mismanagement of most state-owned industry decreased economic output and created a recession. 1951 was then known as the "black year" within Seratof.

Prior to the formation of the People's Republic of Seratof, the Auja, a historically signficant and stable currency, was still respected and massively traded, especially in central Artemia, for its continued use of the which ensured that the value of the Auja does not stray that far from the value of gold itself. The politburo scrapped the idea of a gold standard early on in 1949 and made the currency an entirely free-floating one, driving away most foreign users and traders, causing the relative value of the Auja to plummet. The official rationale of the government was that "the subsequent loss of Value in our Auja is a good side effect for the booming rebirth of Seratofian industry, which will make our exports more favorable in the outside world."

Heightening inflation (1951-1952)
Mismanaged industry and collectives brought food and industrial production down. Seratof, which relied both on domestic production and international imports, suffered from the brutal wave of shortages. Domestic production fell by over 40% in most industries causing massive shortages and crises in shops, most of them state-owned by now. With the value of the Auja plummeting and foreign reserves dwindling in order to supplant the Auja, Seratof failed to garner its once-prized imports from overseas. The few that made it into the country were sold at extravagantly higher prices than the ordinary Seratofian could afford, and was seen as the beginning of they hyperinflation period in Seratof.