What tools do central banks use to control inflation?

Central banks use several tools to control inflation. One of the primary tools is adjusting interest rates, specifically the benchmark rate, which influences borrowing costs for consumers and businesses. By raising interest rates, central banks can reduce spending and borrowing, helping to slow inflation. Conversely, lowering rates can stimulate spending and investment. Another tool is open market operations, where central banks buy or sell government securities to manage the money supply. Additionally, central banks can use reserve requirements, controlling the amount of money banks must hold in reserve, which also impacts lending and inflation levels.