The role of the central bank is to manage a country's monetary policy from "summary" of How Finance Works by Mihir Desai
The central bank plays a crucial role in safeguarding a country's monetary stability through the management of its monetary policy. This responsibility entails overseeing the money supply, interest rates, and the overall financial system to ensure economic stability and growth. One of the primary tools at the central bank's disposal is setting interest rates, which influences borrowing, spending, and investment decisions. By adjusting interest rates, the central bank can stimulate or cool down the economy as needed. Lowering interest rates, for example, can encourage borrowing and...
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