Question

Why do we need a Central Bank for an economy?

Answer 1

Central bank plays a crucial role in ensuring the economic and financial stability in the economy. Bank conducts the monetary policy to achieve low and stable inflation. During any global financial crisis, central bank expands their toolkits to deal with risks to financial stability and to manage volatility exchange rate.

The primary goal of the central bank is to provide their countries' currencies with price stability by controlling inflation in the country. A central bank also acts as the regulatory authority of a country's monetary policy. Central bank is the sole provider and printer of notes and coins in circulation.

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