Central banking systemand its functions Manto AlexanderBudget and Treasury Academy in Moscow2009
Contents Definition Main functionsCurrency issuanceNaming of central banksMain policy instrumentsConclusion
Central bank Monetary authority of a country granted the exclusive privilege to lend a government its currency.
Main functions controlling money supplymoney issuancesetting the official interest rateimplementing monetary policy
Currency issuance Exclusive privilege of a central bank
Examples of naming Bank of country National bank of Reserve bank of
Main policy instruments Open market operationsReserve require ratioDiscount rate policy
Open market operations Do not require the immediate printing of new currency Most frequently used tool of central bank
Required reserve ratio
Discount rate policy Affect the balance between demand and supplyTaken into account before starting business
Conclusion Central bank system becomes the most important mean of economy policy in crisis period
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