Monetary Policy Implementation

The implementation of monetary policy requires both well-defined goals and a consistent set of policy instruments to achieve them. This one-week course will place central banks’ monetary policy operations in the context of the broader monetary policy strategy. It will emphasize the link between policy formulation and implementation, discuss monetary policy objectives and instruments, and explain the functioning of the monetary policy transmission mechanisms. The course will then focus on the operational details of implementing monetary policy, including the interest rate steering approach and the role of a central bank’s balance sheet. The course will also cover specific aspects of monetary policy implementation: liquidity analysis, the operational design of conventional and unconventional monetary policy instruments, the role of foreign exchange interventions, and the consistency of operational frameworks. Finally, the course will also cover current challenges in monetary policy implementation, including the environmental, social and governance (ESG) aspects