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Question
What is meant by the central bank of a country?
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Solution
The central bank leads the money market and regulates credit volume to ensure stability. Credit money accounts for a significant portion of the country's total money supply. Excess credit leads to higher pricing, imports, and decreased exports, which in turn result in an unfavorable payment balance.
The goal of credit control is described below:
- The stability of internal prices.
- The foreign exchange rate is stable.
- Promoting high employment.
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