Combined with China's actual situation, discusses how the central bank uses the traditional three major monetary policy tools to regulate the economy

Monetary policy objectives are the ultimate goals that the central bank or monetary authority of a country wishes to achieve by adopting monetary policy.

Including: economic growth, price level stability, full employment, interest rate stability, exchange rate stability, balance of payments. Although a central bank cannot bring about these ends directly, it can formulate different policies in response to the variables it can influence. There is often a conflict between the many objectives of monetary policy, where policy can achieve one objective but also make another more difficult to achieve.

In China, the choice of monetary policy objectives has two propositions in practice: one is a single objective, with currency stabilization as the first and basic goal; the other is a dual objective, which is to stabilize the currency and develop the economy at the same time.

From the viewpoint of the historical evolution of the monetary policy of the central banks of various countries, no matter whether it is a single objective, dual objectives or multiple objectives, they cannot be detached from the economic and social environment of the time as well as the most prominent basic contradictions faced at that time. However, monetary policy should maintain sufficient stability and continuity, the policy objectives can not be biased and variable.

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