Monetary policy are steps taken by central bank of a country to achieve various objectives such as stable economic growth, controlling money supply etc. However the increasing interdependence of country on each other and the uncertainties of global market has reduced the effectiveness of monetary policy, especially in small open economies.

MONETARY POLICY AND GLOBAL INTERDEPENDENCE 

1. Fluctuations in dollar exchange rate: Fed Tapering by USA  affects the supply of dollar which has a spillover effect on policies 0f all economies.
2. Crude oil supply : Excessive dependence on Gulf countries for crude oil render small countries susceptible to an energy crisis affecting growth.
3. Imported inflation : Increasing dependence on imports for meeting local demands can render monetary policy tools ineffective in controlling inflation. Example: India is dependent on imports for its defense needs.
4. Geopolitical tension affecting global trade : For example Trade sanctions imposed on Russia due to the Russia-Ukraine conflict affecting economies of other countries and causing shortage of food grains in international market.
5. Geographical problems  affecting trade : Droughts in Panama canal which is a conduit for maritime trade, and  sieging of major choke points as Bab al Mandab straits and Suez canal by non state actors(terrorist).
6. Global pandemics :  Monetary policy was ineffective during the pandemic, Almost all economies for world were marked by slowdown of economic growth (3.1%for India) and increase poverty and unemployment.

Thus the challenges brought in by globalization can not alone be tackled by monetary policy. The policy is to be backed by other strategies such as

1. signing free trade agreements to promote trade
2. import substitution to become self sufficient
3. currency swap agreements to reduce dependence on dollar etc.

Thus rendering the monetary policy effective in controlling inflation and achieving desired economic growth.