Monetary Measures to Control Inflation

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Monetary policy refers to the actions taken by a central bank to manage the money supply and interest rates in an economy, to achieve goals such as controlling inflation. Inflation occurs when the general price level of goods and services rises over time, often due to increased demand or higher costs. To control inflation, central banks use various measures to reduce the money supply or make borrowing more expensive, which helps slow down economic activity and stabilize prices. Common monetary measures to control inflation include the bank rate, open market operations, and the reserve requirements ratio.



Sara Pathshala was started in Nepal to help students master complex Economics and Banking concepts for TU exams and Lok Sewa.

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