What is a relation between inflation and interest rate? Does interest rate depends on inflation or o
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As in the case of England inflation rate is even below the governement targeted rate of 2% at the same time interest rate has been increased 4 times
What is a relation between inflation and interest rate? Does interest rate depends on inflation or otherwise?Inflation is a persistent increase in a general price levels.
Yes indeed, Interest rate depends on inflation. Actually, there is a negative relationship between both of them.
Three/four months ago the inflation rate was raised upto 3.1% and to control inflation rate government has increase the interest rate to 5.7% and consequently, inflation dropped to 2.7%.( Increase in interest rate, decrease in inflation rate. negative relation.)
This is also true that inflation rate is undercontrol but still interest rates are increasing steadily becasue it is pridicted that inflation rate might increase.
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What is a relation between inflation and interest rate? Does interest rate depends on inflation or otherwise?Inflation means that the value of money is dropping which means that when banks want to loan money they have to increase their interest rates because the money loaners will pay back money which will be worth less. So banks try to match the inflation rate so they don't lose money.
It's much, much more complicated than that though.
What is a relation between inflation and interest rate? Does interest rate depends on inflation or otherwise?More Related Questions and Answers ...
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