The impact of global monetary policy on economic growth is an important issue that is being paid attention to by many countries, especially in the context of increasingly strong world economic interdependence. Monetary policy, which is managed by the central bank, has a direct effect on interest rates, inflation, and the availability of liquidity in an economy. One of the main impacts of global monetary policy is changes in interest rates. Lowering interest rates by central banks, for example, provides a boost to lending and investment. This facilitates the growth of the business sector and accelerates public consumption, which in turn drives economic growth. Conversely, increasing interest rates can slow economic growth because higher borrowing costs will reduce investment and consumption. In addition, loose monetary policies in developed countries often have an impact on global capital flows. When central banks like the US Federal Reserve implement low interest rates, many investors seek higher yields in emerging markets. This could lead to asset inflation in these countries, which could ultimately create systemic risks if not managed well. Inflation is another aspect that is influenced by monetary policy. Policies that are too loose can produce inflationary pressures, which harm people’s purchasing power. On the other hand, tight monetary policy aims to suppress inflation, but can also restrain economic growth. Central banks must find a balance between keeping inflation in check and supporting growth. Global monetary policy also impacts currency exchange rates. Different policies between countries can create volatility in the foreign exchange market. Exchange rate fluctuations affect the competitiveness of a country’s exports and imports. For example, a slowdown in the exchange rate can increase the competitiveness of export products, but it can also increase the cost of importing raw materials, which has an impact on domestic inflation. In a regional context, countries that are members of an economic area can be mutually affected by their respective monetary policies. Monetary policies implemented by large countries in one region can affect the stability and growth of small countries in the surrounding area. For example, the actions of the European central bank may affect other European Union member states, given their close economic interconnectedness. Changes in global monetary policy may also present challenges for developing countries. Developing countries which are supported by foreign debt will find it difficult when monetary policy tightens in developed countries, because this can increase debt costs and affect economic growth. Finally, monetary policy responses to global economic crises, such as the COVID-19 pandemic, demonstrate how rapid intervention and recovery policies can maintain economic stability. However, these measures must be balanced to prevent long-term risks such as uncontrolled inflation. Thus, an in-depth understanding of the impact of global monetary policy on economic growth is very important for policy makers and economic actors throughout the world.
