Quantitative Tightening (QT)
Quantitative Tightening (QT) is a monetary policy process in which a central bank reduces the size of its balance sheet or withdraws liquidity from the financial system, typically by allowing securities to mature without reinvestment.
Example: Example: After QE programs ended, the central bank began QT by not reinvesting maturing securities, resulting in a gradual decline in its asset holdings and a reduction in reserve balances.
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