Central banking system and its functions

Contents

Definition
Main functions
Currency issuance
Naming of central banks
Main policy instruments
Conclusion

Central bank

Monetary authority of a country granted the
exclusive privilege to

Main functions

controlling money supply
money issuance
setting the official interest rate
implementing 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 operations
Reserve require ratio
Discount rate policy

Open market operations

Do not require the immediate printing of new currency

Required reserve ratio

Discount rate policy

Affect the balance between demand and supply
Taken into account

Conclusion

Central bank system becomes the most important mean of economy policy