Advertisements
Advertisements
Question
The Central Bank is the apex monetary institution of the country. Explain its role of a custodian of foreign exchange reserves.
Advertisements
Solution
As a custodian of the cash reserves of the commercial banks, the central bank maintains the cash reserves of the commercial banks. Every commercial bank has to keep a certain percentage of its cash reserves with the central bank by law.
APPEARS IN
RELATED QUESTIONS
The rate of which commercial banks borrow from the Central Bank is the:
The difference between the value of security and the amount of loan sanctioned against these securities is known as:
During deflation, the Central Bank usually ______.
In order to encourage investment in the economy, the central bank may ______.
Bank rate is the rate at which:
The process of buying and selling of securities by the central bank of a country is known as ______.
What is meant by open market operations?
Explain the following function of the central bank of a country.
Fixation of margin requirement on secured loans.
Identify the following Credit Control measures undertaken by the Central Bank during inflation.
The Central Bank increases the rate at which it lends to the Commercial Bank.
Describe two quantitative credit control measures of the Central Bank.
