Comment on Business Line: On Federal Reserve's track

Nithin Kamath commented on 08 Oct 2013, 11:02 AM

Alok,

Across the world, when interest rates go up it would mean lesser people borrowing money, lesser people borrowing means lesser being spent on goods and this would in turn mean a reduction of the prices of goods because of lesser demand, hence controlling inflation.

Typically central banks have used this ploy to increase interest rates whenever they want the inflation rates to go lower.

Cheers,

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