The main components of Monetary policy are:
1. Interest Rates: Setting short-term interest rates to influence borrowing, spending, and inflation.
2. Reserve Requirements: Regulating the minimum reserves commercial banks must hold, affecting lending and money supply.
3. Open Market Operations (OMO): Buying or selling government securities to increase or decrease money supply and influence interest rates.
4. Liquidity Management: Managing the overall liquidity in the financial system to ensure financial stability.
5. Forward Guidance: Communicating future policy intentions to influence market expectations and shape economic outcomes.
6. Quantitative Easing (QE): Creating new money to purchase assets, injecting liquidity, and stimulating the economy.
7. Credit Control Measures: Regulating credit flows to specific sectors or industries to manage risk and promote financial stability.
Interest Rates: Setting short-term interest rates to influence borrowing, spending, and inflation.
2. Reserve Requirements: Regulating the minimum reserves commercial banks must hold, affecting lending and money supply.
3. Open Market Operations (OMO): Buying or selling government securities to increase or decrease money supply and influence interest rates.
4. Liquidity Management: Managing the overall liquidity in the financial system to ensure financial stability.
5. Forward Guidance: Communicating future policy intentions to influence market expectations and shape economic outcomes.
6. Quantitative Easing (QE): Creating new money to purchase assets, injecting liquidity, and stimulating the economy.
7. Credit Control Measures: Regulating credit flows to specific sectors or industries to manage risk and promote financial stability.
2. Reserve Requirements: Regulating the minimum reserves commercial banks must hold, affecting lending and money supply.
3. Open Market Operations (OMO): Buying or selling government securities to increase or decrease money supply and influence interest rates.
4. Liquidity Management: Managing the overall liquidity in the financial system to ensure financial stability.
5. Forward Guidance: Communicating future policy intentions to influence market expectations and shape economic outcomes.
6. Quantitative Easing (QE): Creating new money to purchase assets, injecting liquidity, and stimulating the economy.
7. Credit Control Measures: Regulating credit flows to specific sectors or industries to manage risk and promote financial stability.
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