In macroeconomics, sterilization is action taken by a country' s central bank to counter the effects on the money supply caused by a balance of payments surplus or deficit. This can involve open market operations undertaken by the central bank whose aim is to neutralize the impact of associated foreign exchange operations. The opposite is unsterilized intervention, where monetary economics, hyperinflation is very high and typically accelerating quickly erodes the real value of the local currency, as the prices of all goods increase.
This causes people to minimize their holdings in that currency as they usually switch to more stable foreign currencies, often the US Dollar. Prices typically remain stable in terms of other relatively stable currencies.