ABSTRACT
BECAUSE THEY INVOLVE TRANSFERRING MONEY between payers and payees, payment systems constitute the link between money and economic activity. The efficiency with which money is used is largely determined by the efficiency of the payment system. On the one hand, monetary policy cannot be implemented in the absence of a payment system, nor can it be implemented efficiently without an efficient payment system. On the other hand, the monetary policy framework may itself affect the efficiency of a country’s payment system. So the next section considers the relationship between payment systems and monetary policy.
