Hyperinflation in Yugoslavia: An Example in Monetary History

Hyperinflation most often occurs at a time when the amount of money in circulation is increasing without the Gross Domestic Product (GDP) showing growth. Excessive printing of money from the monetary authority (central bank) in a country is a fundamental reason for hyperinflation. The case of hyperinflation in the Federal Republic of Yugoslavia (FRY) in the early 1990s represents one of the largest hyperinflations in history. It was a time of wars in the former Socialist Federative Republic of Yugoslavia (SFRY) and it is followed by sanctions imposed on FRY by the international community, for participation in war activities in the territories of other former SFRY Republics. Starting from 1992, the Yugoslav dinar experienced a hyperinflation episode which lasted for a total of 25 months. Prices are rising very fast, so that in late 1992 and in 1993, hyperinflation erupted, taking on almost unimaginable proportions. In the whole of 1993 prices went up by 116.5 thousand billion percent, and in the first three weeks of 1994 by 313 million percent.