Currency collapse refers to the sharp depreciation of a country's currency in a short period of time, which may trigger a large-scale economic crisis and have a long-term impact. Currency collapse is often associated with many financial crises. During the currency crash, the value of a country's currency fell sharply. One cause of currency collapse is speculative attacks. People think that money will depreciate, so they choose to sell it to make up for the loss. When the currency was sold, the value of the currency began to decline, and the government had to buy excess currency to keep the exchange rate stable. People are selling more and more foreign exchange reserves, causing their value to continue to fall.

The harm of currency collapse

The collapse of a country's currency will definitely lead people to lose confidence in the country's currency and cause the currency to depreciate continuously. Currency devaluation will lead banks and central banks to oversell the currency, which will accelerate the currency depreciation, thus forming a vicious circle, and hyperinflation will become more serious, making the government unable to make ends meet. After a long time, people abandoned their own currency, and finally lost the control and distribution rights of the currency, causing serious economic retrogression.