Impact of inflation on purchasing power and currency devaluation

Abstract

Inflation is characterized as a continuous increase in prices, caused by the loss of purchasing power and currency devaluation. Starting with an economic sphere as the financial situation of a country, the liquidity of a currency is linked to the monetary policy adopted by the current government. In accordance with these arguments, this work aimed to study the variation and exchanges of currency over the years and the relevance of the IPCA index in household budgets. The research was based on a bibliographic survey with the support of articles, books and periodicals that have already delimited themselves to the study of this issue. Data from the IPCA was used, which is considered the official inflation index in Brazil, measured, and released by the IBGE. The research contains images, represented through tables showing the trajectory and evolution of the currency in Brazil. Inflation is defined as the rise in the price of basic consumer items, since it is one that measures prices in general, the isolated rise of a particular product, good or service cannot be considered inflation. Brazilian currency over the years went through several changes that affected the liquidity of the economy and the purchasing power of consumers. This research presents the problem of how the Brazilian currency has undergone changes over the course of the high inflation rates. This study is justified by the relevance of the topic for society in general, and not just for professionals in administration, accounting, and economics. Through the analysis and measurement of the data, it was obtained as a result that the population's purchasing power is largely concentrated in the acquisition of basic products and services that make up the IPCA's basic basket. On the other hand, as for the economic plans adopted in Brazil, they all had the common objective of stabilizing the economy, containing the unbridled rise in prices.