Relation between Inflation and Bank interest Rates
Now a days, you might have heard lot of these terms and usage on inflation and the bank interest rates.
We are trying to make it simple for you to understand the relation between inflation and bank interest rates in India.
Bank interest rate depends on many other factors, out of that the major one is inflation. Whenever
you see an increase on inflation, there will be an increase of interest rate also.
Inflation is defined as an increase in the price of bunch of Goods and services
that projects the Indian economy. An increase in inflation figures occurs when there is an increase in the average level of
prices in Goods and services. Inflation happens when there are less Goods and more buyers, this will result in increase in
the price of Goods, since there is more demand and less supply of the goods. |