Dictionary Home »
Invest » monetary policy
monetary policy investment & finance definition
The
plan undertaken by a central bank, such as the Federal Reserve Bank in the
U.S., to influence the cost and availability of money and credit. Monetary policies
are put into effect in order to help promote national economic goals. For
example, a monetary policy may be followed to raise or lower short-term
interest rates. Printing more money and putting it into circulation is a
monetary policy that is followed when a country faces deflation, or falling inflation, because this strategy tends
to increase inflation.
See monetary policy in Wall Street Words
Learn more about monetary policy