Role of the Central Bank

Central Banks generally have a degree of autonomy, but ultimately they are answerable to and act on behalf of the government.

Typically, the following functions are performed by the Central Bank.
• Sole Issues of legal tender
• Banker to the clearing banks – the clearing banks keep their operation l deposits at the Bank.
• Banker to the Government.
• Supervision of the financial system.
• Lender of last resort.
• Borrows money on behalf of the government.
• Instrument of government monetary policy.



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