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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4 percent in January 2011, driven by higher international food prices and an accommodative monetary policy.
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.
The flood of liquidity created by a period of very accommodative monetary policy pursued the yields available from income-producing assets, namely loans and bonds.
For example, the FOMC had been pursuing a very accommodative monetary policy when energy shocks began to hit the economy in 2003.
The lawmakers also agreed to ask Toshihiko Fukui, who is to become Bank of Japan (BOJ) governor later this month, to issue a strong message showing his resolve to carry out accommodative monetary policy, the officials said.
Early in the second quarter, the dollar fell against the yen as sentiment grew that the Bank of Japan's accommodative monetary policy stance could end as early as the later part of the quarter.
That should be sufficient to ease inflation pressures, implying that the current somewhat accommodative monetary policy stance is appropriate, even though inflation risks are currently tilted to the upside.
Lee Ju-yeol said, 'Since the effects of accommodative monetary policy in boosting demand cannot last for a long time, structural reforms to enhance productivity in the financial and labour sectors are essential for sustainable growth.
Kenya s accommodative monetary policy stance has supported economic activities without triggering inflation or putting pressure on the exchange rate.
In 2015, benign global oil prices are likely to keep India's inflation and current account pressures in check and this could allow for a more accommodative monetary policy which, in turn, would revive investment growth," the report added.