Prepared By: Rakeeb Ashraf From - Notre Dame University Bangladesh

1. Welcome to
All

3. DEFINITION
Monetary Policy is the management of
money supply and interest rates by central
bank to influence prices and employment
for achieving the objectives.

4. Types of Monetary policy
 Expansionary policy: An expansionary
policy increases the total supply of money in
the economy. It is traditionally used to
combat unemployment in a recession by
lowering interest rates.
 Contractionary policy : A contractionary
policy decreases the total money supply. It
involves raising interest rates in order to
combat inflation.

5. Objectives of Monetary
Policy
 Rapid Economic Growth
 Price Stability
 Balance of Payments (BOP) Equilibrium
 Exchange Rate Stability
 Full Employment
 Neutrality of Money

6. Tools of Monetary Policy
 Quantitative Methods
 Bank rate policy
 Open market policy
 Variation of reserve ratio
 Qualitative Methods
 Rationing of credit
 Direct Action
 Regulation of consumer’s credit

7. 05/05/17
Importance of Monetary Policy
 Regulates currencies and reserves
 Manages the monetary and the credit system
 Maintains the par value of domestic currencies
 Promotes and maintains a high level of
production ,employment and economic growth
 Ensures balance of equilibrium

8. THANKYOU