What is monetary policy instruments in Ethiopia?

The final targets of monetary policy in Ethiopia are to maintain price and exchange rate stability and support sustainable economic growth. In achieving these objectives, the NBE sets money supply as an intermediate target. It should be noted that intermediate targets are not directly controlled by the central bank.

What are the five monetary policy instruments?

The main monetary policy instruments available to central banks are open market operation, bank reserve requirement, interest rate policy, re-lending and re-discount (including using the term repurchase market), and credit policy (often coordinated with trade policy).

What are the tools of monetary policy?

Central banks have four main monetary policy tools: the reserve requirement, open market operations, the discount rate, and interest on reserves.

What is monetary policy in economics PDF?

Monetary policy is one of the two principal means (the other being fiscal policy) by which government authorities in a market economy regularly influence the pace and direction of overall economic activity, importantly including not only the level of aggregate output and employment but also the general rate at which …

What is fiscal policy in Ethiopia?

Today, Fiscal Policy is a major topic of debate among prospective and actual policy makers. It is thus timely to review its history and present status in the Ethiopian context. Fiscal policy refers to the management of government spending and taxes to stabilize domestic output, employment, and the price level.

What are qualitative instruments of monetary policy?

The qualitative tools of monetary policy are Rationing of credit, Consumer Credit Regulation, Guidelines, Margin requirements, Moral Suasion. You can read about the Monetary Policy – Objectives, Role, Instruments in the given link.

What are the examples of monetary policy?

Some monetary policy examples include buying or selling government securities through open market operations, changing the discount rate offered to member banks or altering the reserve requirement of how much money banks must have on hand that’s not already spoken for through loans.

What are three tools of fiscal policy?

Fiscal policy is therefore the use of government spending, taxation and transfer payments to influence aggregate demand. These are the three tools inside the fiscal policy toolkit.

What are the 2 tools of fiscal policy?

The two main tools of fiscal policy are taxes and spending. Taxes influence the economy by determining how much money the government has to spend in certain areas and how much money individuals should spend. For example, if the government is trying to spur spending among consumers, it can decrease taxes.

What is quantitative tools of monetary policy?

Quantitative Methods. The quantitative instruments are also known as general tools used by the RBI (Reserve Bank of India). As the name suggests, these instruments are related to the quantity and volume of the money. These instruments are designed to control the total volume/money of the bank credit in the economy.

Which tool is not part of monetary policy?

The specific interest rate targeted in open market operations is the federal funds rate. The name is a bit of a misnomer since the federal funds rate is the interest rate charged by commercial banks making overnight loans to other banks.