Anti-Inflationary Measure

Anti-Inflationary Measure

Any policy a central bank or other agency takes to reduce the inflation rate. In general, anti-inflationary measures involve raising key interest rates, sometimes dramatically, to cut down the money supply. Other anti-inflationary measures include things like instituting price controls, changing the peg of a currency, and outlawing inflation. Raising interest rates, however, is considered to be the best anti-inflationary measure for a floating, fiat currency. See also: Tight money.