Role of central bank in economy

The role of the central bank in the economy is crucial, as it serves as the regulator and controller of the money supply and monetary policy. The central bank is responsible for setting monetary policies to aid economic growth and stability. It has the power to regulate interest rates, control inflation, and maintain the value of the currency. It also regulates the banking system, oversees the payment system, and manages the foreign exchange rate. The central bank acts as a lender of last resort during financial crises to prevent the collapse of the economy. Hence, the central bank plays a vital role in promoting economic development and stability.

This mind map was published on 24 June 2023 and has been viewed 69 times.