Deflation is the opposite of inflation. It is the decrease in the price of a basket of goods and services. Deflation happens when the annual inflation rate turns negative. Such an event is usually brought about by a reduction in the money supply and/or credit.

Currency Impact:
While inflation tends to decrease the purchasing power of a currency, deflation tends to result in an increase in the

Back to Forexpedia Main Page

"It is wise to keep in mind that neither success nor failure is ever final."
Roger Babson
Clicky Web Analytics