We will feel the impact of inflation on economic growth when many prices of goods and services rose broadly and continuously. This will affect the purchasing power of consumers to purchase goods. Another effect, the central bank will raise interest rates to maintain currency stability. The effect of interest rates will also reduce the ability of consumers to borrow money from the bank.
What about the impact on the value of the currency? Inflation will result in the value of a country's currency fell compared with the currencies of other countries. Surely this would be an indicator for forex traders to take a position. This will appear more clearly by using the tools forex, it is the option bot. When the rate of inflation is down it is a sign for a profit.
Overcoming the Effects of Inflation
Actually, the inflation can’t be removed at all, but what to do is press inflation as low as possible so that economic growth can move faster. There are several ways to combat the effects of inflation. Some of the points that is often done to tackle inflation is the central bank can regulate the money supply, increase interest rates or make an open market policy. There are basic things that are important to be done by the government to tackle this inflation is fiscal policy that makes one important point that is urgent to do is raise taxes.
If the inflation rate has reached more than 30% per year, the impact of inflation will be directly felt by the community at large.
