Quantitative Easing (QE)

Quantitative Easing (QE) is an unconventional monetary policy tool where a central bank purchases long-term government bonds or other financial assets from the open market to inject liquidity directly into the banking system, with the primary goal of lowering long-term interest rates and stimulating economic activity when short-term rates are near zero. This process expands the central bank's balance sheet and increases the money supply, aiming to encourage lending, investment, and consumption in periods of economic stagnation or crisis.