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Central Bank Has the Sole Power of Issuing Currency Notes. - Economics

Short Note

Central Bank has the sole power of issuing currency notes.

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Solution

The central bank of a country has the exclusive authority to issue currency (notes + coins), The currency issued by the central bank is known as legal tender, i.e. the value of such currency is backed by the central bank. The central bank is obliged to back the currency issued by it by assets of equal value such as gold coins and bullions, foreign exchange.

Concept: Central Bank Function - Controller of Credit
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