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Inflation target 2, also known as “2% inflation target,” refers to a monetary policy framework in which a central bank sets a target inflation rate of 2% per year as the goal for maintaining price stability in the economy. This means that the central bank aims to keep inflation at a steady, low level of 2% over the long term by adjusting interest rates and other monetary policy tools as necessary. The 2% inflation target has been adopted by several central banks around the world, including the Bank of Japan, the European Central Bank, and the Bank of England. The aim of the inflation target is to support economic growth and stability by promoting a predictable and stable inflation environment.
The effects of inflation are often not directly felt but are played out over a long time, especially long-term investments are vulnerable to inflation.
At Horizon65, we created a mobile app that enabled you to check the effect of inflation on your savings.