accommodative monetary policy


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Related to accommodative monetary policy: Tight Monetary Policy

Accommodative monetary policy

Federal Reserve System policy to increase the amount of money available to banks for lending. See: Monetary policy.

Cheap Money

A monetary policy in which a central bank sets low interest rates so that credit is easily attainable. This makes borrowing easy for business, which stimulates investment and expansion of operations. The immediate result of cheap money is a boost in stock prices; in the medium term, cheap money promotes economic growth. However, if cheap money remains in the economy for too long, it can lead to a situation in which there is a glut of currency or too many dollars chasing too few goods and services leading to inflation. For this reason, most central banks alternate between policies of cheap money and tight money in varying degrees to encourage growth while keeping inflation under control.

accommodative monetary policy

The Federal Reserve policy of increasing the supply of money to make credit more readily available. An accommodative monetary policy tends to lower interest rates, especially the short-term ones, at the time credit is made plentiful. Such a policy is likely to result eventually in increased inflation and interest rates. Compare monetary policy.
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The moderation in inflation should induce the RBI to make a shift towards a more accommodative monetary policy stance to revive investment and propel demand especially as investment demand is declining and consumer durables are in the red.
As far as macroeconomic concerns, accommodative monetary policy replaced the European debt crisis as the the greatest risk in this area.
The Fed's accommodative monetary policy actions since the financial crisis have lent meaningful support to the economic recovery, as the central bank has relied on forward guidance about the path of the federal funds rate and large-scale asset purchases, Federal Reserve Vice Chair Janet Yellen said at a Washington, DC, conference sponsored by the International Monetary Fund.
Accommodative monetary policy by central banks poses "challenges" for institutional investors and the FSB said that national supervisors would need to enhance their monitoring of credit and interest rate risk.
Muscat, Feb 15 (ONA) During the year 2012, the Omani economy continued the growth momentum aided by high crude oil prices and sustained domestic demand, supported by large public expenditure and accommodative monetary policy pursued by the Central Bank of Oman (CBO) according to the analysis published by CBO.
Later in 2013, economic activity should gradually recover, supported by our accommodative monetary policy stance, the improvement in financial market confidence.
In the statement, they also voiced concern about the adverse effect of an accommodative monetary policy adopted by advanced economies, saying it has created a surge in capital flows into their economies, increased risks to financial stability.
4 percent in January 2011, driven by higher international food prices and an accommodative monetary policy.
NS) (NYSE: HDC), have raised their prime lending as the Reserve Bank of India (RBI) is downgrading an accommodative monetary policy stance by increasing key policy rates, the report said.
The expansion in reserve money is consistent with the moderately accommodative monetary policy stance currently adopted by the Bank, the report said.
DUBAI: Oman's central bank may continue pursuing an accommodative monetary policy for an extended period and expects a pressure on the currency if inflation differential to the United States widened further, it said on Thursday.