Central Bank


Central banks

Central banks

The central bank is the authority responsible for policies affecting the current currency, such as changing the requirements of regular banks’ reserves, borrowing facilities, and short-term interest rates, which is in the interest of the economy in general.
The first central bank was established in the seventeenth century in the year 1668, and the first institution to launch the central bank was Sweden under the name “The Swedish Central Bank”. Then Napoleon established several central banks in Europe, then England established a central bank in it in 1694, and a central bank was established. In France in the year “1800”, then the US Central Bank was established in the twentieth century in “1913”.
One of the most important tasks of the Central Bank is to provide financial services, as it works on cashing its checks, lending money to its members, buying and selling large quantities of foreign currencies to influence the supply and demand for money, and it also works to regulate exchange rates to control inflation, in addition to producing economic statistical reports to guide Financial policy decisions in the country.
Control of financial policies in the country, central banks set interest rates on loans and bonds and usually raise interest rates to slow growth and avoid inflation or reduce them to stimulate growth and industrial activity in addition to consumer spending in the country, and in this way central banks manage monetary policy to guide the state’s economy.
Managing financial controls during emergencies, central banks work to develop and manage financial controls during periods of severe inflationary pressures and shortages of supplies, especially in periods of war, as the government in such circumstances imposes measures to limit borrowing for unnecessary purposes, such as buying consumer goods or homes, and central banks manage These measures determine the maximum loan amount and the period during which the funds must be returned.
Influencing the economic growth in the country, by controlling the liquidity allocated to the financial system in the country, as this is done through a set of measures, the most important of which is.
Control the amount of cash that must be available in banks, use open market operations to buy and sell securities from other banks, control interest rates allocated to loans and bonds.