Identify causes of inflation in our country is due to an imbalance of supply and demand of money, so the first policy that the government used to curb inflation using monetary policy tightening. The first step is the central bank increased reserve requirement ratio from 10% to 11%, and increase the base rate up to 12% 13% 14%. This adjustment moves the central bank has made deposit interest rates of commercial banks increased, promoting people to send money in the bank. at the same time, the government instructed commercial banks to tighten credit in order to restrict flows of money into circulation. This is a measure to be considered to be quite heavy-handed government aims to cut back the amount of cash in the economy, because the implementation of measures will be effective soon, but would cause a major disturbance in the background economy, reducing economic growth of the country.
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