Practicing Success
Which of the following is a "Function" of a central bank of a country? |
Controls money supply Banker to the government Custodian of the forex reserves All of the above |
All of the above |
Central bank has several important functions. It issues the currency of the country. It controls money supply of the country through various methods, like bank rate, open market operations and variations in reserve ratios. It acts as a banker to the government. It is the custodian of the foreign exchange reserves of the economy. It also acts as a bank to the banking system. |