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Glossary: QE

Photo: US dollars
Photo: US dollars

Acronym in full: quantitative easing

Quantitative easing (QE) is an unconventional monetary policy used by central banks to stimulate the economy when standard monetary policy has become ineffective. With the objective to lower interest rates and increase money supply, the central bank may introduce QE by purchasing a predetermined quantity of government bonds or other financial assets from the market. QE was first used by the Bank of Japan to fight domestic deflation in the early 2000s. Since 2008, QEs have been adopted by the United States, the United Kingdom, and the Eurozone to mitigate some of the adverse effects of the global financial crisis.


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