Quantitative easing is a monetary policy tool used by central banks to increase the money supply in an economy. It involves creating new money electronically and using it to purchase financial assets, such as government bonds or other securities, from commercial banks or private investors. This increases the amount of cash in circulation, which can help stimulate economic growth and reduce the cost of borrowing for businesses and individuals. Quantitative easing is typically used when conventional monetary policy tools have been exhausted, and interest rates are already at their lowest levels.