Monetary policy is used by a central bank of a country to try to manage and control the money supply for a currency in its banking system and internationally. A central bank tries to use monetary policy to lower the rate of inflation and create price stability for faith and confidence in the stable value of buying power of their currency. A central bank also sets interest rates at a specific level for short-term borrowing between banks for loans. Central bank monetary policy is different than fiscal policy for a nation. Fiscal policy is set through taxes along with a budget for the government spending and borrowing. ... (full story)