Monetary Policy refers to those actions and decisions undertaken by the Bank to create appropriate conditions that are in line with the economic objectives of the country.  In conducting monetary policy, the Bank keeps a close watch on economic developments with a view to maintaining a low and stable rate of inflation, an orderly foreign exchange market and an adequate level of foreign exchange reserves.  It then utilises a range of monetary policy tools to influence the level of liquidity in the banking system which indirectly influences the level of interest rates and, ultimately, the overall demand for goods and services in the economy.

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