im afraid you are also abit wrong dear..Let me straighten up the issue...the inflation right now is due to over supply of currency as well as low production of goods(less suply). Low supply and higher demand makes price high..ok..now govt decreased rates...this will let people take out their money from banks and invest in those products which are lower in supply and having favorable prospects to invest in and thus they will make higher profits than they will be having in bank accounts..so goverment did this wid no intention of increasing money supply in market but to spur production and economic growth which will lead to higher goods supply and lower prices...yes money supply would increase but the fear of its disastrous affects could be in the case if industries are performing at its best(equilibirum exists in production and consumption) and therez been an inflation only bcs of higher number of currency notes out...i hope its the easiest way o elaborate..I second to Mr rao adeel and SA haider...