tight money

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Tight money

When a restricted money supply makes credit difficult to secure. The antithesis of tight money is easy money.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Tight Money

A situation in which it is difficult to receive credit because of the monetary policy of the central bank. Tight money occurs when the central bank has enacted relatively high target interest rates. While this usually happens when the central bank is seeking to control or is concerned about inflation, tight money can negatively impact security prices and make it hard to receive a loan for a house or business.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

tight money

A condition of the money supply in which credit is restricted and interest rates, consequently, are relatively high. Tight money generally has a negative effect on security prices, at least in the short run. Compare easy money.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

tight money


dear money

a government policy whereby the CENTRAL BANK is authorized to sell government BONDS on the open market to facilitate a decrease in t he MONEY SUPPLY (see MONETARY POLICY).

The decrease in money supply serves to increase INTEREST RATES, which discourages INVESTMENT because previously profitable investments become unprofitable owing to the increased cost of borrowing (see MARGINAL EFFICIENCY OF CAPITAL



Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005
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The government of New Zealand has said that it has tightened trust laws following the Panama Papers disclosure.
Hungary's central bank has tightened its collateral rules.
The banking watchdog in Europe has tightened its rules covering Internet payment services.
The central bank of Singapore has announced that it has tightened capital and credit rules.
The central bank of Peru has tightened reserves for the fourth time this year.
The central bank of Singapore has tightened its currency policy.