Monetary Policy

Monetary PolicyMonetary Policy
The main objectives of macroeconomic policies, in general, and monetary policies, in particular, are price stability, economic growth and a favorable employment level. Since it is hard for policy makers to achieve the ultimate goal directly, therefore, determining intermediate objectives and introducing appropriate instruments are deemed necessary. In case of monetary policy, the issue of setting an intermediate objective is often reflected in controlling rate of return and money supply. With the monetary policy aimed at controlling monetary aggregates, attempts are made to prevent monetary expansion, incompatible with liquidity and inflation targets set in the development plans, and to finance productive and investment sectors.