Sequential Consequences of Inflation: A VICIOUS CYCLE
Uncertainty about the value or expected value of a currency.
Capital Flight and decrease of international reserve.
Increase of interest rates = Decrease on private investment.
Currency devaluation = Increase on price of foreign inputs.
People do not want to hold money = Increase consumption driven prices up.
Value of Taxes decreases = Increases pressure over fiscal deficit.
A vicious cycle begins enhancing the volatile environment.
People begin to anticipate inflation.