A framework decided in public.
The intended approach to the Aletheian Guilder, and how its policy will be decided.
A fiat currency
A fiat currency is trusted for the rules that govern it, not for a promise to exchange it.
The intended direction for the Guilder is a fiat currency: money issued by the State’s monetary institution under law, as most of the world’s currencies are.
Responsible issuance
- Issuance follows rules
- Currency is issued only under adopted rules that say when, how much and on whose decision.
- Issuance is recorded
- Every issue is entered in a public register, so that the amount of money in existence is always known.
- The issuer does not spend
- The Bank does not create money to finance the State’s budget. Public spending is paid for by public revenue.
- Stability
- Keeping the Guilder’s purchasing power steady over time is the central consideration of policy.
How policy will be decided
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Research
Proposals are prepared with their evidence and the options considered.
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Consultation
Proposals are published for public comment, with a period to respond.
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Adoption
Policy is adopted by the competent body and the decision is recorded.
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Publication
The adopted policy is published here, together with its reasons.
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Review
Each policy is reviewed on a set date, through the same process.
How monetary policy works
A central bank influences the cost and availability of money, and through them spending, saving and prices.
When money is plentiful and cheap to borrow, households and businesses tend to spend and invest more; when it is scarcer, they save more and spend less. Over time this affects how fast prices rise. Monetary policy uses this connection to keep prices stable, adjusting with care because its effects take time to show.
The instruments the Bank will use, and the measure by which it will judge its success, will be set out in its monetary policy framework.
Decisions, explained
- A published calendar
- Policy decisions will be taken on dates announced in advance.
- A statement with every decision
- Each decision will be published with a statement of its reasons.
- A regular report
- A monetary policy report will set out the Bank’s assessment of the economy.