Monetary Policy refers to actions and decisions undertaken by the Bank to create appropriate conditions that are in line with the country’s economic objectives. In conducting monetary policy, the Bank closely monitors economic developments to maintain 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.