Category: Inflation
Hyperinflation
Hyperinflation is an important economic term, which refers to the unrestrained rise in the rate of inflation. In fact, Hyperinflation is nothing but an economic condition characterized by rapid escalation in the prices, at a time when the value of the currency goes down. The term ‘Hyperinflation’ is used to denote highly low rates, on an unofficial level.
Inflation And Interest Rate
Interest and inflation are key to investing decisions, since they have a direct impact on the investment yield. When prices rise, the same unit of a currency is able to buy less. A sustained deterioration in the purchasing power of money is called inflation. Investors aim to preserve the value of their money by opting for investments that generate yields higher than the rate of inflation. In most developed economies, banks try to keep the interest rates on savings accounts equal to the inflation rate.
