Financial Terms Dictionary: ELI5 Version - Monetary Policy

Monetary Policy:

an integral facet of macroeconomic management, denotes the strategic formulation and implementation of a nation's central bank's actions to regulate the money supply, credit availability, and interest rates within the economy, with the ultimate objective of achieving macroeconomic stability and sustainable economic growth. Anchored in monetary theory and guided by economic indicators, this policy framework seeks to influence aggregate demand, price levels, employment, and overall economic performance.