Monetary Management: Monetary management is about the management of the volume of the quantity of money It is the process by which

the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability
Monetary mangement rests on the relationship between the rates of interest in an economy, that is, the price at which money can be borrowed, and the total supply of money. Monetary policy uses a variety of tools to control one or both of these, to influence outcomes like Growth Economy Inflation Exchange rates with other currencies unemployment.

Where currency is under a monopoly of issuance, or where there is a regulated system of issuing currency through banks which are tied to a central bank, the monetary authority has the ability to alter the money supply and thus influence the interest rate (to achieve policy goals).

Objectives of Monetary Management:

Economic Growth: It is the major objective of monetary management it is a short term objective thats continues economic expansion through optimal utilization of resources Price Stability: It is one of the long term objectives it involves controlling inflation which is now becoming almost an integral part of our economy Intermediate Targets: Targets set by the Federal Reserve as part of its monetary policy goals intermediate targets can be any economic variable that is not directly controlled by the central bank it includes: Interest rate targeting Money stock targeting Nominal stock targeting Credit planning Commodity prices Spread b/w short and long term loan

 Monitoring of money and FX Market activities Money operation Conducting auctions for raising short term and long term domestic debt for the government Providing funds to the financial institutions as lender of last resort Managing external debt repayments

Goals:

Liquidity Management & Implementation of Monetary Policy Objectives Maintenance of the overnight rate within the implicit corridor as agreed in the MPS by using the available tools: Open Market Operations Discount Rate

Forecasting of daily cash flows in the interbank market for the next two weeks in order for effective liquidity management in accordance with Monetary Policy Objectives Monitoring of surplus liquidity invested in government securities over and above reserve requirements o Monitoring of various interest rate curves of the market for gauging Expectation or any other market behavior Responsible for Conducting Auctions of Treasury Bills, Pakistan Investment Bonds, Ijara Sukuk on behalf of GoP
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