Whilst I am fully aware that most of you would like to know about the future developments in interest rates, I will however disappoint you since there will be no “open mouth operations” today. What I thought of doing was to take you systematically through the steps which leads the Monetary Policy Committee to take decisions on monetary policy.
I have made the rather crude assumption that most of you are not monetary economists - I am using Yusuf Abramjee as my benchmark! 1. What is monetary policy? Let us start from the beginning and consult The New Oxford Dictionary of English. It says on page 1193 that, “Monetary: adjective of or relating to money or currency “(1998 Edition).