Functions of Central Bank
Name: Ogayo Julius Muga
Ref. No: 19201/2010
BANKING & INSURANCE
CENTRAL BANK
A central Bank is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country.
The central bank often also oversees the commercial Banking system within its country.
A central Bank is distinguished from a normal commercial bank because it has a monopoly and creating the currency of that nation, which is usually that Nations legal tender.
Central Bank of Kenya is the highest Banking institution in the country and responsible for ensuring the smooth working of banking sector and other financial institutions.
Central Bank differs from commercial banks in that it does not engage in ordinary banking activities e.g. accepting deposits from the general public.
It is owned by the government while commercial banks are owned by shareholders. CBK usually implements certain government policies.
OBJECTIVES OF CENTRAL BANK OF KENYA
i. To formulate and implement monetary policy directed to achieving and maintaining stability in the general level of prices. ii. The Bank fosters the liquidity, solvency and proper functions of a stable market based financial system. iii. Support the economic policy of the government including its objectives for growth and employment. iv. Formulate and implement foreign exchange policy
v. Hold and manage its foreign exchange reserves. vi. License and supervise authorized dealers vii. Formulate and implement such policies as best promote the establishment, regulations and supervisions of efficient and effective payment, clearing and settlement systems. viii. Act as banker and advisor to and as fiscal agent of the government. ix. Issue currency notes and coins.
FUNCTIONS OF CENTRAL BANK
i. Implementing monetary policy ii. Determining interest rates. iii. Controlling the Nations entire money supply iv. The Government banker and the bankers bank.
v. Managing the country’s foreign exchange, gold
Ref. No: 19201/2010
BANKING & INSURANCE
CENTRAL BANK
A central Bank is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country.
The central bank often also oversees the commercial Banking system within its country.
A central Bank is distinguished from a normal commercial bank because it has a monopoly and creating the currency of that nation, which is usually that Nations legal tender.
Central Bank of Kenya is the highest Banking institution in the country and responsible for ensuring the smooth working of banking sector and other financial institutions.
Central Bank differs from commercial banks in that it does not engage in ordinary banking activities e.g. accepting deposits from the general public.
It is owned by the government while commercial banks are owned by shareholders. CBK usually implements certain government policies.
OBJECTIVES OF CENTRAL BANK OF KENYA
i. To formulate and implement monetary policy directed to achieving and maintaining stability in the general level of prices. ii. The Bank fosters the liquidity, solvency and proper functions of a stable market based financial system. iii. Support the economic policy of the government including its objectives for growth and employment. iv. Formulate and implement foreign exchange policy
v. Hold and manage its foreign exchange reserves. vi. License and supervise authorized dealers vii. Formulate and implement such policies as best promote the establishment, regulations and supervisions of efficient and effective payment, clearing and settlement systems. viii. Act as banker and advisor to and as fiscal agent of the government. ix. Issue currency notes and coins.
FUNCTIONS OF CENTRAL BANK
i. Implementing monetary policy ii. Determining interest rates. iii. Controlling the Nations entire money supply iv. The Government banker and the bankers bank.
v. Managing the country’s foreign exchange, gold