Monetary policy

If prices rise sharply, your money quickly loses its value. If prices keep falling, you postpone your purchases and the economy slows down. That is why all eurozone central banks together aim for 2% inflation over the medium term, in order to maintain price stability. This way, not only you, but also companies can plan for the future more easily. Of course, the central banks and the ECB do not directly determine whether prices fall or rise, but they do have a toolbox full of instruments with which they can indirectly influence inflation through monetary policy.

Why did it do so and what does it mean for you?