Central Bank of Central Bank for Economic Development

Running Head: Essay
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Essay 2
Table of Contents
Introduction......................................................................................................................................3
Importance of Central Bank for Economic Development...............................................................3
Financial Institution Development...............................................................................................4
Adjustment of Demand and Supply of Money............................................................................5
Affordable Interest Rate Policies.................................................................................................6
Management of Debts..................................................................................................................6
Controlling Credit Rates..............................................................................................................7
Balance Payments Problems........................................................................................................9
Influences of Central Bank for the Economy..................................................................................9
Macroeconomic Influences........................................................................................................10
Microeconomic Influences.........................................................................................................10
Political Independence and Power of Central Banks.....................................................................11
The Financial Stability Objective in a Crisis for a Central Bank..................................................12
Conclusion.....................................................................................................................................12
References......................................................................................................................................14

Essay 3
Introduction
In any state central bank are the ones which control the money supplied and how it is
delivered to the customers. A central bank cannot just print money and give them to the economy
but it also checks the regulation of the commercial banks in distribution of the money. The
functions of a central include many monetary policies which gives it power over the exchange
rates, money supplied and the inflation. Central bank consists of different tools by which it puts
the control of money. For example, it has the power to adjust the interest rates in controlling the
inflation rates, to weaken the domestic currency it can also buy foreign currency and can also
involve in open market operations by the use of purchase of the assets by financial institutions. It
can be said that a central is based over the rules and regulations of monetary tools to reach its
aims and objectives. These monetary policies differ from country to country but they all have the
common target of inflation, economy growth, unemployment and to become more financially
stable.
For a country with a developing economy the central bank performs customary and
publically required functions. These customary task that are performed by the bank are like
gamble of notes issued, bankers for government, the banks of the bankers, last resorted lenders,
stable exchange rates management and the controller of credits. All of these functions are related
to the functions that help the economy of any state to develop and become more stable.
(Goodhart and Lastra, 2018)
Importance of Central Bank for Economic Development
A central bank of any country always seeks for the betterment and management for the
increasing level of the rate of employees, productivity and incomes for the country. In

Essay 4
underdeveloped countries a central bank provides wide range of powers in order to promote the
growth of its economy. Their main tasks and functions include the following towards this end.
(Barresi and Zatti, 2020)
Financial Institution Development
Central bank of any country which is underdeveloped aims in improving and enhancing
the currency and the system of credit of the state. In order to do so the central bank requires more
institutes or banks that has for setting up it gives large credit facilities and also distract the
intended reserves to fecund networks. These monetary institutes are contained in the bigger
capitals of the infantile states so it can provide the facility of credit to the estate, commercial
houses, industries and even plantations. To solve this central bank has to spread its division for
bank to other rustic parts to make the credit system obtainable for the laborers, minor businesses
and dealers. The central provides one short-term loans in the underdeveloped countries.
(Goodhart and Lastra, 2018) The credit facility system for the rural areas is mostly not present.
Only sources for the rural areas for such credit systems are the village moneylenders who will
charge extraordinary interests on the loans.
This rule of village moneylenders can be diminished by installation of new institutional
arrangements by the central banks that can provide short, medium and long-terms of credit at low
interest rates for the people of the rural areas. Therefore, a network of these cooperative credits
banking system from the central banks can help to solve these problems. It would be very helpful
for the establishment of the lead banks through the regional rural banks that can provide credit
facility system to the farmers, agriculture workers and other people of the village. Since the
central bank has a vast resource under their command, they can help in establishing financial