ISLAMABAD: The Finance Ministry is making due efforts to lower the existing inflation rate in the country to boost the economic activities as well as to ensure smooth economic development.
A well-placed source at Finance Ministry Tuesday told this scribe here that the Ministry was taking numerous measures to control the rate of inflation including keeping the policy rate at 10 percent to control inflation through Monetary Policy rate.
In economics, inflation is a sustained increase in the general price level of goods and services in an economy over a period of time. When the general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation reflects a reduction in the purchasing power per unit of money – a loss of real value in the medium of exchange and unit of account within the economy.
Negative effects of inflation include an increase in the opportunity cost of holding money, uncertainty over future inflation which may discourage investment and savings, and if inflation were rapid enough, shortages of goods as consumers begin hoarding out of concern that prices will increase in the future.