What is the role of the Central Bank in the National Financial System?

The Central Bank plays a crucial role in the national financial system by serving as the backbone of the economy. It is responsible for regulating and overseeing the banking sector, ensuring the stability of the currency, and managing monetary policy. The Central Bank acts as the lender of last resort for commercial banks, providing liquidity during financial crises and safeguarding the stability of the banking system. Additionally, it conducts open market operations, influencing interest rates and controlling the money supply to promote economic growth and control inflation. Through these functions, the Central Bank plays a pivotal role in maintaining financial stability and fostering economic development within the national financial system.

This mind map was published on 3 October 2023 and has been viewed 92 times.