Finance and inflation

Inflation is a depreciation of money shown in a general and uneven rise in prices on goods and services.

Measures of anti-inflationary policy:

Realization of adaptation policy when measures are applied on indexation of incomes, wages, interest rates, investments. The companies and firms realize the short-term projects, the physical persons search for additional sources of incomes.

Realization of complexes of anti-inflationary measures on decrease or suppression of inflation.

Anti-inflationary policy includes various methods of restriction of money offer:

1. Reduction of volume of money weight in circulation through reduction of cash issue by the Central bank.
2. Increase of the registration rates (refinancing) for the centralized credits with the purpose of rise in price of all credit resources and decrease of their availability.
3. Increase of the reserve requirements of the Central bank to commercial banks for achievement of compression of the credit multiplier and restriction of credit expansion of commercial banks.
4. Direct reduction of credits of the Central bank in the same purpose.

The anti-inflationary fiscal policy is conducted by increase of taxes, reduction of state expenditures and on the basis of it, decrease of deficiencies of the state budge

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