Why do some currencies use such outrageous amounts for things? For instance, if I want to buy a banana in the US it’s about $1 but in Vietnamese dong it would be over 23,000. Why don’t they start their currency with low numbers?

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Why do some currencies use such outrageous amounts for things? For instance, if I want to buy a banana in the US it’s about $1 but in Vietnamese dong it would be over 23,000. Why don’t they start their currency with low numbers?

In: Economics

2 Answers

Anonymous 0 Comments

They did start with smaller numbers. Google “runaway inflation” or “chronic inflation” and you’ll see how things ended up where they are today. But essentially, if you start with a 100 dong note and 50% annual inflation, in just 10 years you need nearly 6,000 dong to purchase what 100 dong used to buy. At 75% inflation, you need 27,000 dong and at 100% inflation, you need 102,000 dong. The amounts at 20 years are 333K, 7.26MM and 105MM respectively.

Anonymous 0 Comments

They do have small numbers. It’s just that their currency has less global market value than a US dollar.