. Although some of these objectives are particularly similar among different central banks, each has its own unique objectives for its own economies. The ultimate goal is to ensure price stability and economic growth. In order to achieve the above objectives, the central bank controls the following indicators through monetary policy: interest rate, inflation, money supply, legal reserve ratio and discount rate for commercial banks. There are several kinds of common monetary policies:

the following kinds of monetary policies:

tight monetary policy: it reduces the money supply by various means, usually by raising interest rates. High interest rates lead to higher borrowing costs and lower spending and investment activities of consumers and enterprises, thus slowing down economic development.

expansionary monetary policy: it usually increases the money supply or reduces the corresponding interest rate. When the market borrowing cost falls, the social spending and investment activities will also increase.

neutral monetary policy: this policy will neither stimulate economic growth nor fight inflation.

. For example, the target of 3% will determine whether it uses the tightening monetary policy or the expansionary monetary policy. The central bank will probably not express its goal clearly, but its monetary policy is always around maintaining inflation in a comfortable range most monetary policies are adjusted in a small range, because the large-scale behavior of the central bank will cause a big stir in the market. That's why we see interest rate adjustments between 0.25% and 1% each time. Remember, central bank policy is to maintain stability, not create panic.

. But their decision is about the economy as a whole, not a single deal. What's more, the real effect of monetary policy may take a year or two.