FREQUENTLY ASKED QUESTIONS WHAT IS MONETARY POLICY?
Jan 10, 2008: Monetary policy deals with the money supply and interest rate management. Central Bank of a country prepares the monetary policy. The Central Bank inserts appropriate amount of money into the economy or withdraws the required amount of money from the economy to control interest rate which is set for short term. Short term interest rate is expressed in many names. They are: Inter-bank interest rate, money market rate, call money rate, overnight interest rate, overnight policy rate, Fed Fund rate, official cash rate etc.
