Monetary policy is the process of managing a country's money supply to achieve specific policy goals â€” such as constraining inflation, achieving full employment, social well-being, or other definitions of economic or political stability. See for instance reference to global debt and climate change in the context of money policy below.
Monetary policy can involve open market operations to affect interest rates and exchange rates, setting and enforcing bank cash reserve rules/ requirements, setting capitalization standards (defining "capital adequacy") for private banks and acting as the lender of last resort.
Policy can also involve direct restrictions on lending and direct money creation though these are less commonly used instruments.
[+] vs. monetary reform
money creation, economic policy, Bank of Canada, Bretton Woods System, exchange rate, Bank of International Setttlements