Central Bank Policies

Central bank policies involve managing a country's money supply and interest rates to promote economic stability and growth. Key tools include setting interest rates—higher rates can slow inflation, while lower rates encourage borrowing and spending. Central banks also buy or sell government bonds to influence the amount of money circulating. These actions help control inflation, support employment, and ensure financial stability. Essentially, central banks act as stewards of the economy’s financial health, adjusting policies as needed to foster steady growth and prevent economic turmoil.