Monetary Policy - Business concept of the day

Monetary Policy - Business concept of the day

Economy

GlobalLinker Staff

GlobalLinker Staff

10 Jul 2018, 10:48 — 1 min read

Definition: Monetary policy consists of 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.



Example: The Central Bank raised interest rates, an indicator that it was shifting its monetary policy in a bid to deal with the latest crisis in the economy.



Business insight: Fiscal Policy and Monetary Policy are tools in the hards of the Government and the Central Bank to mitigate any harmful impact of the business cycles that an economy goes through generally.

 

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