unconventional monetary policy

Unconventional monetary policy refers to non-standard tools used by central banks to stimulate the economy when traditional methods, like lowering interest rates, are insufficient. Examples include quantitative easing, where a central bank buys assets to inject money into the economy, and forward guidance, which involves communicating future policy intentions to influence economic expectations. These measures aim to encourage spending and investment during economic downturns, increase liquidity in financial markets, and support overall economic recovery when conventional tools have reached their limits.