Overview of the Banks Functions & Operations: CBSI as Currency Authority
Article No. : 05/2020
A central bank cannot achieve its multiple objectives without the support of other government policy measures or what is commonly called Fiscal Policy. Economic activity, which is a measure of the total expenditures of households, businesses and government for consumption and investment, is influenced by both monetary and fiscal policies and must work in tandem. A policy action taken by a central bank or government to achieve a particular objective may conflict with another stated objective, hence underscoring the need for consultation on and synchronization of policy objectives, targets and instruments.
In this article we introduce the 4 main policy instruments CBSI is equipped with, to effectively influence the factors of which affect the money stock, focusing more on the first policy, Central Bank as Currency Authority.