Monetary Policy Framework

Da Afghanistan Bank (DAB) employs a framework of targeting monetary variables in the formulation, adoption, and implementation of its monetary policy. Within this framework, DAB uses monetary policy instruments to manage the supply of money and liquidity in the economy.

Managing liquidity conditions plays a vital role in the economy. Any fluctuation in liquidity levels can directly influence overall economic activity within the country. Therefore, adjustments to liquidity must be carefully aligned with the pace of economic growth and the prevailing demand for the national currency in the economy.