Inflation

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I am well pleased by the way my post was accepted in the OCD channel recently. I'm posting it on OCD and it's because I have not been able to find the rights community for this article I decided to post it in the OCD community. Today, I will be writing about inflation.

Source [Jack Prichett]

Recently we saw some certain news about the economic crisis that few of the countries in the world are facing recently.

I mean to say "inflation" . The 📈 trend with which inflation is taking shape in the continent of the world this days are very significant and it needs to be taken care of before people at the lower class will not be able to afford what they need with the little money that they are having anymore
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In the UK and US there are several complaints about inflation and many people are having the opportunity to tackle the government however the ground of inflation is a general economic issue which every country has to face.

In Nigeria according to the CBN news the inflation rate rules to about 16.45% in the month of April and in the month of may it was 17.71% and in the month of June about 18.60% I think this is driving to a higher percentage if care is not taken.

Many assumed that inflation is caused by the war between Ukraine and Russia which are the top countries known for exportation of goods and food worldwide. However, this can be said to be a threat to other nations that depend on Ukraine and Russia. There is more to inflation than the recent

What is the approach to tackle this inflation?
The first thing is that the rate at which the inflation is hovering is not stable, this is taking shape in the quadratic equation (Y=a+b). Where a and b are two different unstable factors which are depending on interest rate and financial policies.

It was glaring that many nations spent a lot of money during the year 2020 in response to the pandemic which was worth it but not all nations got the money from their reserves, some borrow money from other Nations while few have enough in reserve for the unexpected pandemic. For nations that borrowed money and had to pay back, some increased their interest rate on money lent out to business owners and many established organisations.

According to investopedia "there is both contrasting and expansionary monetary policy via which a nation can come out of ever increasing inflation" the contrasting monetary policy. A system of whereby interest rates on loans issues to manufacturing companies are increased and by the way there is little flow of money. History told us that this method was adopted in years past and it helped in reducing the inflation to the minimum in a few years.

However, considering the latter, money is allowed to flow by reducing interest rates on loans from the central bank thereby reducing interest rates offered to small and large scale businesses which helps the growth of new businesses in order to circumvent excessive inflation.

Source: [Credit; Nathan Sison]

In conclusion, many parts of the world that practice expansionary monetary policy flourish more. In a country like Nigeria where the interest rate is high, it might be somehow difficult for an entrepreneur to acquire a loan for his business. With the result which is available according to the CBN, the average inflation rate is considered to be increasing at an unstable rate