The primary function of a central bank is to set monetary policy.
To exercise control on the entire amount of money in circulation, put into action policies like raising interest rates and changing bank reserve requirements, promote economic growth, a nation's central bank implements various tools all together know as the monetary policy.
Under a twin mandate to increase employment while managing inflation, the Federal Reserve Bank of the U.S. carries out monetary policy
Monetary policy is the process of regulating both the total amount of money in an economy and the channels by which it is distributed.
Economic variables such as the GDP, inflation rate, and sector- and industry-specific growth rates have an impact on monetary policy strategy.
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