MONETARY CONTROL Meaning and
Definition
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Monetary control refers to a set of measures implemented by a central monetary authority, such as a central bank or monetary board, to regulate and influence the money supply and credit conditions within an economy. The objective of monetary control is to maintain stability in the financial system, promote economic growth, and keep inflation or deflation within acceptable limits.
The process of monetary control involves various tools and techniques. The central monetary authority typically has the authority to regulate the reserve requirements of commercial banks, which directly affects the amount of money available for lending and spending. They may also use open market operations, buying or selling government securities, to inject or withdraw funds from the financial system to control interest rates and liquidity.
Additionally, monetary authorities may set and adjust the benchmark interest rates, such as the discount rate or the overnight lending rate, to manage borrowing costs and influence consumer and business spending decisions. They may also intervene in foreign exchange markets to control exchange rates and protect the domestic currency.
Monetary control is crucial in maintaining macroeconomic stability and managing the business cycles of an economy. It aims to strike a balance between stimulating economic growth and managing inflationary pressures. Through effective monetary control, the central monetary authority can influence the flow of money and credit, impacting the overall availability of funds, interest rates, and investment opportunities in the economy.
Common Misspellings for MONETARY CONTROL
- nonetary control
- konetary control
- jonetary control
- minetary control
- mknetary control
- mlnetary control
- mpnetary control
- m0netary control
- m9netary control
- mobetary control
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- mojetary control
- mohetary control
- monwtary control
- monstary control
- mondtary control
- monrtary control
- mon4tary control
- mon3tary control
- monerary control
Etymology of MONETARY CONTROL
The word "monetary" is derived from the Latin term "moneta", which referred to a temple in ancient Rome where money was minted. This Latin term was ultimately derived from the Greek goddess "Moneta", who was regarded as the protectress of the currency. Over time, "moneta" became associated with the concept of money itself.
The word "control" comes from the Latin term "contrarotulus", which referred to a roll or register used to keep records. From there, it evolved into "controler" in Old French and "controller" in Middle English, signifying a person who oversees or regulates something.
When combined, "monetary control" refers to the regulation, management, or oversight of a country's money supply and financial system.
