Central Bank

The Central bank and other financial institutions play important roles in the financial sector.

A central bank is a nation’s primary monetary authority. It wears the hats of, regulator (of commercial banks, building societies, merchant banks, financial houses and other financial institutions), lender of last resort (lends money to financial institutions, at higher interest rates), implementer of monetary policies (the management of money supply and interest rates), implementer of fiscal policies(through which it determines appropriate levels of government spending and taxation) and it also is a reserve(it holds a percentage of the total deposits, made to each financial institution).

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