Monetary Policy Analysis I: Fundamentals, Operations and Strategies

Modern central banks operate in an increasingly complex environment shaped by persistent inflation pressures, rapid financial innovation, global spillovers, and heightened uncertainty. To navigate such challenges, a solid understanding of the fundamental concepts, frameworks, and tools of monetary policy is essential.

This foundational course offers a clear and accessible introduction to how monetary policy works, why central banks use specific frameworks, and how policy decisions affect inflation, output, exchange rates, financial markets, and public expectations. Designed for staff across all central bank departments, the programme demystifies key concepts and builds the intuition required to follow policy discussions, interpret central bank communication, and engage meaningfully in macro-financial deliberations.

Through structured lectures, real-world case examples, and guided discussions, participants will acquire the core foundational literacy needed to understand central bank decision-making and to appreciate the linkages between monetary policy, financial stability, and the broader macroeconomy.

The course will be delivered by SEACEN faculty and supported by external experts from academia and central banking.

Objectives

At the end of the course, participants should be able to: (1) compare and contrast various monetary policy frameworks; (2) analyse and explain the monetary policy transmission and policy instruments; (3) differentiate unconventional monetary policy to conventional monetary policy; (4) evaluate ongoing structural trends and concerns that have monetary and financial implications, such as digital currencies, and climate change risks; (5) compare and contrast various exchange rate regimes, and assess the effectiveness of foreign exchange intervention.

Target Participants

Staff from all central banks or monetary authority departments who require strong foundational literacy in monetary policy. A general understanding of macroeconomic and financial issues is beneficial but not required. Participants must attend at least 80% of sessions to receive a certificate of completion.

Software Requirements

Have a laptop/desktop, or any portable device, with a good internet connection; Laptop/desktop should have a microphone and webcam to be able to participate in the sessions; Google Chrome browser installed before the start of the course; Access to Microsoft Teams on your device; Ability to receive email from The SEACEN Centre, Cvent and SurveyMonkey (e.g.xxxxx@seacen.org)

Potential Topics

• Monetary Policy Objectives, Mandates and foundations of modern central banking
• Monetary policy theory, frameworks and strategies (exchange rate, monetary targeting, inflation targeting)
• The channels of monetary policy transmission mechanism
• Unconventional monetary policy and the central bank balance sheet
• Inflation dynamics and expectations in small open economies
• Interest rate pass through in advanced and emerging economies
• Monetary policy operating procedures and basic monetary operations
• Exchange rate regimes and foreign exchange intervention
• Monetary policy communication, credibility and expectations anchoring
• Central bank digital currencies and implications for monetary policy
• Monetary policy, asset prices and financial stability linkages
• Monetary policy and structural considerations-income inequality and climate risks
• Interaction between fiscal policy, public debt and monetary policy in small open economies.