Monetary Policy

Definition

Monetary policy refers to actions taken by a central bank (such as adjusting interest rates or controlling money supply) to manage and stabilize an economy's money supply, credit availability, and interest rates.

Related terms

Fiscal Policy: Government policies concerning taxation and spending that influence economic activity.

Inflation Targeting: A monetary policy strategy aimed at maintaining low and stable inflation rates over time.

Open Market Operations: The buying or selling of government securities by central banks to control money supply and interest rates.