what is monetary policy?

Answer 1

Monetary policy is the government or central bank process of managing money supply to achieve specific goals—such as constraining inflation, maintaining an exchange rate, achieving full employment or economic growth. Monetary policy can involve changing certain interest rates, either directly or indirectly through open market operations, setting reserve requirements, or trading in foreign exchange markets

Answer 2

Monetary Policy

The actions of a central bank, currency board, or other regulatory committee, that determine the size and rate of growth of the money supply, which in turn affects interest rates.

Investopedia Commentary

In the United States, the Federal Reserve is in charge of monetary policy.

The Federal Reserve actions that are designed to influence the availability and cost of money. Specific policy includes changing the discount rate, altering bank reserve requirements, and open-market operations. In general, a policy to restrict monetary growth results in tightened credit conditions and, at least temporarily, higher rates of interest. This situation can be expected to have a negative impact on the security markets in the short run, although the long-run effects may be positive because of reduced inflationary pressures

Answer 3

Monetary policy is the policy adopted by the central bank of a country (RBI in case of India) to regulate the money supply in the economy. The instruments of the policy includes open market operations (buying and selling of treasury notes, etc.), alteration of interest rates (through bank rates, liquidity adjustment facility ((repo & reverse repo) )etc.) and operating in the forex market. The objectives of the policy includes regulating inflation, credit supply, pegging of the country's currency against foreign currencies, etc. Nowadays, the monetary policy of many developed countries and to some extent, that of India aims at inflation targeting, i.e., to regulate the inflation level within the predetermined comfort level.

Answer 4

Monetary policy usually refers to how a government's central bank manages the money supply. Sometimes this involves changing interest rates. Sometimes it involves changing the amount of money available.