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Postby doaausef3li » Mon Oct 15, 2018 7:11 pm

Secrets of Monetary Expansion

The monetary policy, called bond purchase, implemented by many large central banks, has been at an important point especially in recent years due to its impact on both the real economy and financial markets. The objectives and results of the said method, also known as monetary expansion, should be understood by investors correctly, as they may lead to harsh movements in the markets.
التداول بالعملات الاجنبية forex
This application, which is frequently used in quantitativeeasing or shortly as miktar QE Quant on the world economy agenda and applied by the central banks to provide support for the revival of economic activities, is based on increasing the amount of money circulating within the national economy.

After the Mortgage crisis in 2008, many countries' economy began to shrink due to the financial tightness between banks. The low liquidity led to a rapid decline in economic activity, while the unemployment rate rose to be a major problem in most developed countries. In the recovery process after the onset of the crisis, governments and central banks have generally resorted to similar practices in order to increase the speed at which the wounds in the damaged economies are increased. The central banks of countries such as America, Europe, Japan and the United Kingdom have begun to gradually reduce policy interest rates as a first reaction. The purpose of the interest rate reduction is to ensure that private banks can borrow from the central bank with lower costs and to increase the economic efficiency by increasing the amount of money in the circulation. Interest rates lowered down to historic levels contribute to the return of the wheels of the economy, while also leading to a decline in the unemployment rate.
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However, due to the deep effects of the crisis, central banks had to reduce the interest rates to almost zero levels. However, growth rates and the inability to reach the desired levels of unemployment led to the central banks being unable to provide further support to the market through the interest rate instrument. At this point, the monetary expansion programs started to come into play, while central banks preferred to invest in the market by buying valuable papers in the hands of private banks.
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