Monetary Policy Framework

DAB uses the framework of targeting monetary variables in formulating, adopting and executing its monetary policy. In this framework, DAB uses monetary policy tools to control liquidity condition in the economy.

Controlling liquidity condition is highly important in the economy; hence any changes in the rate of liquidity have a direct impact on the overall economic activities in the country. Therefore, changes in liquidity rate should be consistent with the rate of economic growth as well as the demand for the national currency in the economy.