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Central banks

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Central banks

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Functions of a central bank

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LBG lbg
LBG lbg
Tunisia

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Central banksOnline version

Functions of a central bank

by LBG lbg
1

borrow credit settle reserves issue capital deposited

The main functions of central banks are to implement the country's monetary policy .
- Central Banks are the only banks to be allowed to banknotes and coins .
- A Central Bank is the Government's banker : when short of money , the government may from the bank .
- A Central Bank is in charge of the keeping of the country's gold .
- A Central Bank is a " Bankers' bank " , and all other banks have large sums there . They use these to accounts among themselves .
- A Central Bank regulates the flow of into and out of the country .
- A Central Bank regulates the amount of available in the country ; one of the instruments used is the Bank Rate , which is the rate of interest the Central Bank will apply to depositors and borrowers . This will obviously influence the lending rate used by all the other financial and commercial institutions and organisations .

 
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