Hostfiles are probably better in the long term than government control of DNS servers. Censorship at the DNS level is one of the low-hanging fruit of dictatorships.
The price of goods can vary somewhat based on public sentiment, but the underlying cause is the printing of money. And it is correct of the public to mistrust a government that has proven untrustworthy in the past. The first steps to regain confidence are to end money production and cut expenses. A drunkard can't be trusted unless he is seen without a bottle first. So basically the government cleaned up its act first, there was no deception. If deception had indeed happened, money production would have still accelerated.
There is no such thing as a "real value" as measured in a vacuum. Value only comes in relation to something: a commodity or a basket of goods. What they did in Brazil was to establish a new currency which the government promised not to inflate, then as inflation destroyed the previous currency, the way was open for the new one. This is how inflation was ended in Weimar Germany, post-WW2 Hungary, '90es Serbia/Romania/Russia. Only Zimbabwe handled things so poorly that the national currency vanished completely.
Even if people learn the value of their inflating money with respect to more stable things, inflation STILL eats away at the value of their savings. It does them no good to learn prices are stable (with respect to an arbitrary standard) except to learn they are indeed getting poorer.
Also, freezing bank accounts and banning the trade of foreign currency only makes matters worse. People not being able to access their money does make them poorer still.
1. You can't inflate at leisure without destroying the currency.
2. You can't have a peg to a foreign currency if you keep inflating faster than that currency's central bank.
3. You can't then cover up for the misdeeds of the government by denying people access to their savings.