Monetary Policy in Developing Countries: The Way Forward
1. Introduction Monetary Policy is concerned with the changes in the supply of money and credit. It refers to the policy measures undertaken by the government or the central bank to influence the availability, cost and use of money and credit with the help of monetary techniques to achieve specific objectives. Monetary policy aims at influencing the economic activity in the economy mainly through two major variables i.e. (a) money or credit supply and (b) the rate of interest. According to A.J. Shapiro, "Monetary Policy is the exercise of the central bank's control over the money supply as an instrument for achieving their objectives of economic policy." Monetary Policy is not an end in itself, but a means to an end. It involves the management of money and credit for the furtherance of the general economic policy of the government to achieve the predetermined objectives like Neutrality of money, price and exchange rate stability, full employment and economic g