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Monetary in sentence

5081 examples of Monetary in a sentence

On monetary policy, the European Central Bank’s forward guidance – the commitment to keep interest rates at a low level for a long time – is too little too late and has not prevented a rise in short- and long-term borrowing costs, which could stifle the eurozone’s already-anemic economic recovery.
There are no easy choices: defending the currency by hiking interest rates would kill growth and harm banks and corporate firms; loosening monetary policy to boost growth might push their currencies into free-fall, causing a spike in inflation and jeopardizing their ability to attract capital to finance their external deficits.
In short, for “policies affecting the exchange rate” to become part of trade agreements, monetary and fiscal policies would have to become part of trade agreements.
Consider the problem that would be posed by the eurozone – an economy that faces major challenges in reconciling its members’ divergent monetary, fiscal, and exchange-rate needs.
In fact, the issue of large actual or potential discrepancies between aggregate savings and investment in countries or monetary zones, reflected in current-account imbalances, is at the heart of the IMF’s emerging multilateral surveillance role; it has been a focus of the G-20 as well.
Prices in Houston, Texas (to use prices in a similar unitary monetary area, the US) are 26% less than in NY, and somewhat less than in Los Angeles.
Some Americans view Fed Chairman Ben Bernanke as a modern-day wizard, able to revive the economy through a swish of his monetary wand – first ultra-low interest rates, then quantitative easing, and perhaps eventually money-printing.
More than any other policy action, monetary policy suffers from the sense that there is a free lunch to be had.
While wage inflation in the US is contained, global monetary policy is probably excessively loose – one reason that oil prices have taken off.
As Milton Friedman emphasized, however, the links between monetary policy and inflation are “long and variable.”
Only by acknowledging the limits to knowledge can monetary and exchange rate policies have a better chance of succeeding.
But that was due largely to an aggressive easing of monetary policy following the Federal Reserve’s successful assault on double-digit US inflation.
For its part, the People’s Bank of China (PBOC) has engaged in cautious monetary loosening, which includes freeing up more funds for lending by banks that allocate a certain proportion of their total loan portfolio to SMEs.
If it loosens monetary policy further – by, say, cutting banks’ reserve requirement ratio – the momentum for restructuring could be lost; and there is no guarantee that the additional liquidity would flow into the real sector.
That is why further monetary loosening by the PBOC, though necessary to address faltering growth, will not be enough.
In order to lower funding costs to a reasonable level, without undermining China’s economic-restructuring effort, monetary policy must be combined with well-designed and concerted financial reform.
In this context, Germany again finds itself in a situation akin to that of the late 1980’s, when the Bundesbank was setting monetary policy for the rest of the continent.
At that time, German Chancellor Helmut Kohl wisely concluded that German economic dominance of Europe was not conducive to a stable equilibrium, and that a better plan for the future was to build on Germany’s weight and influence to create a permanent common monetary order.
One argument emphasizes the links between fiscal and monetary policy.
At home, all that is left is unconventional monetary policy.
It also requires effort to build four types of institutions required to maintain growth momentum and build resilience to shocks:Market-creating institutions (for property rights and contract enforcement);Market-regulating institutions (for externalities, economies of scale, and information about companies);Market-stabilizing institutions (for monetary and fiscal management);Market-legitimizing institutions (for social protection and insurance).
Janet Yellen, the Fed chair, has repeatedly said that the impending sequence of rate hikes will be much slower than previous monetary cycles, and predicts that it will end at a lower peak level.
The dollar is almost universally expected to appreciate when US interest rates start rising, especially because the EU and Japan will continue easing monetary conditions for many months, even years.
First, the divergence of monetary policies between the US and other major economies is already universally understood and expected.
Moreover, monetary policy is not the only determinant of exchange rates.
Finally, the widely assumed correlation between monetary policy and currency values does not stand up to empirical examination.
In some cases, currencies move in the same direction as monetary policy – for example, when the yen dropped in response to the Bank of Japan’s 2013 quantitative easing.
Looking at the monetary tightening that began in February 1994 and June 2004, the dollar strengthened substantially in both cases before the first rate hike, but then weakened by around 8% (as gauged by the Fed’s dollar index) in the subsequent six months.
The globally disruptive effects of US monetary tightening – a rapidly rising dollar, capital outflows from emerging markets, financial distress for international dollar borrowers, and chaotic currency devaluations in Asia and Latin America – may loom less large in next year’s economic outlook than in a rear-view glimpse of 2015.
When monetary policy could not do much more, the Bush administration took up the charge--and with relish.
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