Monetary Policy Strategy

Monetary policy strategy refers to the plans and actions taken by a country's central bank to manage the economy by controlling money supply and interest rates. By adjusting these levers, central banks aim to achieve goals like stable prices, low unemployment, and economic growth. For example, lowering interest rates can encourage borrowing and spending, while raising them can help reduce inflation. The central bank’s strategy often includes setting specific targets and using various tools, such as open market operations, to influence financial conditions and maintain overall economic stability.