Session

Management, Business and Economics

Description

The main goal of the ECB monetary policy is to keep prices stable and the inflation rate below or close to 2% in the medium term. The legal basis for the single monetary policy is set out in the Treaty on European Union, the Treaty on the Functioning of the European Union, and the Statute of the ECB and the ESCB. The monetary policy strategy of the Eurozone countries is also associated with the stability of the balance of payments

To achieve its main objective, the ECB uses a set of monetary policy instruments as well as various procedures. The Euro system operations framework consists of the following set of instruments: Open market operations; Instruments available (permanent); Minimum reservation

Inflation represents an increase in the price of goods and services, thus reducing the role of money as a medium of exchange, acting as a tax on the holding of money. An environment with inflation makes it difficult for firms and individuals to make decisions, thus reducing economic efficiency.

Not much attention has been paid directly to the exchange rate, but the main objective (price stability) of the ECB-led monetary policy depends on exchange rate movements

Interest rates play a very important role for a country's economy; they are the main aggregate for securing or absorbing liquidity in the banking market.

Keywords:

Monetary policy, single monetary policy, monetary policy instruments, ECB, euro area, member states, interest rate, exchange rate, inflation.

Proceedings Editor

Edmond Hajrizi

ISBN

978-9951-550-47-5

Location

UBT Kampus, Lipjan

Start Date

30-10-2021 12:00 AM

End Date

30-10-2021 12:00 AM

DOI

10.33107/ubt-ic.2021.525

Included in

Business Commons

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Oct 30th, 12:00 AM Oct 30th, 12:00 AM

Monetary Policy in the Eurozone

UBT Kampus, Lipjan

The main goal of the ECB monetary policy is to keep prices stable and the inflation rate below or close to 2% in the medium term. The legal basis for the single monetary policy is set out in the Treaty on European Union, the Treaty on the Functioning of the European Union, and the Statute of the ECB and the ESCB. The monetary policy strategy of the Eurozone countries is also associated with the stability of the balance of payments

To achieve its main objective, the ECB uses a set of monetary policy instruments as well as various procedures. The Euro system operations framework consists of the following set of instruments: Open market operations; Instruments available (permanent); Minimum reservation

Inflation represents an increase in the price of goods and services, thus reducing the role of money as a medium of exchange, acting as a tax on the holding of money. An environment with inflation makes it difficult for firms and individuals to make decisions, thus reducing economic efficiency.

Not much attention has been paid directly to the exchange rate, but the main objective (price stability) of the ECB-led monetary policy depends on exchange rate movements

Interest rates play a very important role for a country's economy; they are the main aggregate for securing or absorbing liquidity in the banking market.