Monetary Policy Framework

A Monetary Policy Framework refers to the set of strategies and tools that a country's central bank uses to manage its economy by controlling the money supply and interest rates. The main goals are to promote economic stability, control inflation, and support employment. By adjusting interest rates, the central bank influences borrowing and spending. For instance, lowering rates can encourage spending and investment, while raising rates can help curb inflation. This framework is crucial for maintaining overall economic health and ensuring the currency retains its value over time.