👉 The Treasury Fluid, also known as the Monetary Base, is a critical component of a country's monetary system, primarily comprising reserves held by commercial banks at the central bank. This includes government securities that are readily available for the central bank to buy or sell in the open market, influencing the money supply and interest rates. When the central bank injects treasury fluids into the economy, it increases the money supply and lowers interest rates, stimulating economic activity. Conversely, withdrawing treasury fluids reduces the money supply and raises interest rates, helping to curb inflation. Essentially, the Treasury Fluid serves as a tool for monetary policy, allowing central banks to manage economic conditions effectively.
