The Role of Central Banks in Green Monetary Policy: A Systematic Literature Review

Climate change has introduced new challenges to global economic stability, prompting central banks to reconsider their roles in supporting the transition to a low-carbon economy. This study aims to evaluate the role of central banks in green monetary policy through a Systematic Literature Review (SLR) approach. By analyzing 31 selected scholarly articles from reputable international journals, this research identifies trends, instruments, and institutional dynamics related to the integration of climate policy into the monetary policy framework. The findings indicate that central banks have begun to develop instruments such as green quantitative easing, a preference for green bonds, and environmentally oriented window guidance. Nevertheless, the effectiveness of green monetary policy is significantly influenced by institutional capacity, cross-sectoral coordination, and the presence of a supportive legal framework. This review underscores the importance of evidence-based approaches, regulatory harmonization, and the strengthening of sustainability frameworks in designing climate-responsive monetary policies. The resulting policy implications are expected to serve as a reference for policymakers in enhancing the role of central banks in the era of climate change.