What are the objectives of central banks?

Central banks have several important objectives. Firstly, they aim to maintain price stability by controlling inflation and keeping it at a low and stable level. This helps to foster a stable and predictable economic environment, allowing businesses and individuals to make decisions with confidence. Additionally, central banks work towards promoting economic growth and employment by implementing monetary policies that support these goals. They strive to manage interest rates and money supply in a way that encourages borrowing and investment, which in turn stimulates economic activity and job creation. Central banks also play a crucial role in maintaining financial stability by monitoring and regulating the banking sector, safeguarding the overall health of the financial system. Lastly, they act as lenders of last resort to provide liquidity to banks during times of financial stress, preventing systemic crises and maintaining public confidence in the banking system.

This mind map was published on 17 September 2023 and has been viewed 139 times.