Monetary policy

subclass of the economic policy

Monetary policy is the policy used by the monetary authority of a country that controls either the interest rate that can be paid on very short-term borrowing or the money supply. They often target inflation or the interest rate to help make price stability and general trust in the currency.[1][2][3]

Other goals of a monetary policy are usually to help make the gross domestic product more stable, to get and keep low unemployment, and to have predictable exchange rates with other currencies.


  1. Jahan, Sarwat. "Inflation Targeting: Holding the Line". International Monetary Funds, Finance & Development. Retrieved 28 December 2014. CS1 maint: discouraged parameter (link)
  2. "Monetary Policy". Federal Reserve Board. January 3, 2006.
  3. Levy Yeyati, Eduardo; Sturzenegger, Federico (2010). "Monetary and Exchange Rate Policies". Handbooks in Economics. Handbook of Development Economics. 5. pp. 4215–4281. doi:10.1016/B978-0-444-52944-2.00002-1. ISBN 9780444529442.

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