Monetary policy is a strategy undertaken by a government or central bank to influence a country’s economy or financial system. In the U.S., the central bank, the Federal Reserve, is in charge of ...

Monetary policy: Definition, types and tools . Monetary policy refers to the actions taken by a central bank to manage the money supply and interest rates in an economy. Listen 0:00 .

Though monetary policy broadly affects the money supply, there are different levels of that supply. M1 and M2 supply are technical labels used by central bankers to refer to these different tiers.

Non-standard monetary policies came to prominence during the 2008 financial crisis when the primary means of traditional monetary policy, which is the adjustment of interest rates, was not enough.

The primary difference between fiscal and monetary policy is found in the meaning of the names of the two policies. Monetary refers to the supply of money, or the amount there is to spend.

Mr Pill, who is a member of the Bank’s Monetary Policy Committee (MPC), was among the members to vote against cutting rates to 4.25%, instead preferring to leave them unchanged.