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The Anti Inflationary Measures

The government can take the following steps in order to minimize the inflation.

1. Control note issue
2. Reduce government expenditure
3. Credit control
4. Increase tax rate
5. Open market sales
6. Increase bank rate
7. Loan taken by government from local market
8. Price controlling and rationing
9. Increase production

Anti inflationary measures

Describing the following points at below in brief:

Control note issue

In the inflation situation, government can reduce its new issue of currency note, which will reduce the supply of money in the economy.

Reduce government expenditure

Government can reduce its excess expenditure in case of inflation which will lead to decrease the supply of money in the market.

Credit control

Central bank can take several steps for credit control of the economy.

Increase tax rate

If government increases the tax rate in the period of inflation, that will help to absorbed money from the market.

Open market sales

To collect the excess money from the market, government can sales it Tbond, Tbill in the open market in order to absorbed excess from the investor, peoples.

Increase bank rate

Central bank may increase its bank rate in order to minimize the capacity of issuing excess credit by commercial bank.

Loan taken by government from local market

Sometimes government can borrow money from the local market as loan in order to minimize the excess supply of money.

Price controlling and rationing

In the time of inflation government can take various steps in order to controlling the general price level. Rationing is one of them.

Increase production

By increasing the volume of production, we can minimize the inflation in any economy.

That's all for today. With lots of love and regards Ashraful Haque Saimoom wishes you Good Night.
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