Question

What monetary policy actions have been taken to deal with COVID?

What were the objectives?

How would you know if those actions were effective?

Answer 1

Expansionary monetary policy to create demand in the economies of different countries by their central monetary authority.like lowering of interest rate or repo rate ,open market operation to buy government securties and infuse money in the economies.

The objectives of these policies is to increase money supply in the economy or liquidity increase to deal with decreasing demand and thus to make sure that countries may not enter in recession or depression like situation. By increase demand can save people from hunger, poverty and other problem a little bit, because due to covid 19 lockdown many people have lost their job . This situation have affected lower I'm group or worker class or daily wages worker the most. So government as well as central monetary authority trying to infuse money to save people from hunger ,poverty and decreased purchase power.

If people's purchasing power or demand for necessary good still remain same or decrease a little bit slow , than people are benefiting from this . If monetary transmission is good than these policy action are effective.if use of ICT is done in proper manner and make surity of transparency than these action may effective. If more people are using formal financial system like banks instead of informal system than it's showing effectiveness of the financial administration as well as policy measure taken.