Abstract : Inflation is the rise in the prices of goods and services over a period of time or inflation can also be defined as when too much money chases too few goods or it can also be defined as the loss in the purchasing power of the consumer. Inflation rate is an important macroeconomic indicator and key variable. Most central banks around the world analyze when setting their main policy rate. A stable inflation not only gives a nurturing environment for economic growth, but also uplifts the poor and fixed income citizens who are the most vulnerable in society (Ishfaq and Qasim, 1996)