What is the role of central banks in the economy?

Central banks play a crucial role in the economy by overseeing and managing monetary policy. One of their primary functions is to control the money supply in order to maintain price stability and control inflation. They achieve this by adjusting interest rates, open market operations, and reserve requirements. Central banks also act as lenders of last resort, providing liquidity to banks during times of financial crisis. Additionally, they supervise and regulate banks to ensure the stability of the financial system. Central banks play a vital role in stabilizing the economy, promoting economic growth, and safeguarding the overall financial health of a country.

This mind map was published on 19 September 2023 and has been viewed 102 times.