Inflation rate of India is increasing.how it will affect?

Question

Inflation rate of India is increasing.how it will affect?

Answer 1

Inflation means purchasing power of the official currency is going down. the latest inflation rate is 11.05%. Means by spending Rs. 100 you will be able to get goods/services worth Rs. 88.95 only.

Answer 2

Central bankers will be forced to raise the interest rates. Mortgage rates will be increased accordingly. Less people can afford to buy new homes. Housing prices will come down.

Indian stock market will come down due to decreased demand.

Answer 3

From Bloomberg today. Oil will continue to rise also. Maybe much more so??

``You could easily see for the next several years that prices rise not to $1,000 an ounce, but prices rise to $5,000 an ounce or beyond as inflation psychology becomes more and more embedded and people become desperate to have a source of value,'' said Christopher Wyke, London-based emerging market debt and commodities product manager at Schroder, which oversees about $10 billion of commodity assets.

Investors are turning to gold for protection as two-thirds of the world's population cope with inflation rates that are climbing to more than 10 percent, Wyke said. Cash and inflation- linked bonds are poor substitutes as low interest rates, coupled with surging inflation, erode the real value of assets, he said.

http://www.bloomberg.com/apps/news?pid=2...

Answer 4

Inflation will deflate profits for foreign investors.  As the rupee falls against foreign currencies, it translates into reduced value for investors holding shares in foreign denominations.  It also means Indian central bankers will start raising interest rates to stabilize the currency.  Higher interest rates will put the brakes on growth, India's main driver of the stock market.  India will continue to be profitable, but investors won't see the large gains we've seen over the last few years.

Answer 5

inflation rate of India is increasing so it will fail the current government in future election

Answer 6

if inflation increases ,it reduces the value of ur money,it means if inflation is 10 % ,the value of 100 rupees is 90 rupees, so thatswhy with rising inflation, u have to pay more for everything.