Monetary policy

Monetary policy refers to actions taken by a country's central bank to control the money supply and influence interest rates. It aims to achieve economic goals such as stable prices, low unemployment, and steady economic growth. The central bank can adjust interest rates, reserve requirements, and conduct open market operations to regulate the amount of money circulating in the economy. By doing so, it seeks to maintain a balance that fosters a healthy economic environment. For instance, lowering interest rates can encourage borrowing and spending, while raising rates may help curb inflation.