Investor Education
Monetary policy tools beyond interest rates
Monetary policy involves how a country's central bank manages money supply and interest rates to achieve specific economic goals. This usually primarily involves controlling inflation but can also include ensuring currency stability and supporting employment and economic growth. By adjusting tools such as interest rates, the central bank influences borrowing, spending and investment across the economy to help reach its objectives. Central banks have many other tools at their disposal to influence the economy as well. These tools can manage money supply, guide financial conditions and promote stability without changing policy rates.
19 May 2025
