Monetary policy facts for kids

Monetary policy is the policy used by the monetary authority of a country that controls either the interest rate that can be paid on very short-term borrowing or the money supply. They often target inflation or the interest rate to help make price stability and general trust in the currency.

Other goals of a monetary policy are usually to help make the gross domestic product more stable, to get and keep low unemployment, and to have predictable exchange rates with other currencies.