MONETARY POLICY

Monetary policy is the set of actions through which a central bank manages money and creditconditions to achieve macroeconomic objectives—most prominently price stability, alongsidemaximum sustainable employment, financial stability, and, in many economies, exchange‑ratestability. In practice, this means steering short‑term interest rates, influencing liquidity andexpectations, and ensuring the monetary and financial system transmits policy to households andfirms (CFI; ECB).