Lo 14 Tool of Monetary Policy

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PB 202

MACROECONOMICSMONEY ANDMONETARY POLICY

REALIZE THE ROLE OF THECENTRAL BANK IN

ECONOMY


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Afteryou

complete

thispart,youshould

beableto


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Define role of

central bank ineconomy

The functions of

central bank

THE ROLE OF CENTRALBANK IN IMPELEMENTINGTHE MONETARY POLICY


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CONTRACTIONARY MONETARY

POLICY

EXPANSIONARYMONETARY

POLICY


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LO1: DEFINE ROLE OF CENTRAL BANK IN ECONOMIC

LO2: DISCUSS THE FUNCTIONS OF CENTRAL BANK

LO3: THE ROLE OF CENTRAL BANK INIMPLEMENTING THE MONETARY POLICY

LO3 A: CONTRACTIONARY MONETARY POLICY

LO3 B: EXPANSIONARY MONETARY POLICY


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LO1: DEFINE ROLE OF CENTRAL BANK IN ECONOMIC

The central bank is animportant financialinstitution in every

country. It plays anactive role in

implementing the

governments economicpolicy in the country.Bank Negara Malaysia


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Established on 26 January1959 under the Central Bank

of Malaysia Act 1958 (CBA

1958). The CBA 1958 hasbeen repealed by the

Central Bank of Malaysia Act 2which became effective on 25

November 2009. It is astatutory body wholly owned

by the Government ofMalaysia with the paid-up

capital progressivelyincreased, currently at RM100million. The Bank reports to

the Minister of Finance,Mala sia and kee s the
http://www.bnm.gov.my/index.php?ch=14http://www.bnm.gov.my/index.php?ch=14


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LO2: DISCUSS THE FUNCTIONS OF CENTRAL BANK

1. To issue currency and keepreserves safeguarding thevalue of the currency

2. To act as banker and

financial adviser to thegovernment

3. To be a banker to otherbanks

4. To promote monetarystability and a financialstructure

5.

Be a holder of the countrysstock of gold and foreign


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LO3: THE ROLE OF CENTRAL BANK INIMPLEMENTING THE MONETARY POLICY

LO3 A: CONTRACTIONARY MONETARY POLICY

LO3 B: EXPANSIONARY MONETARY POLICY


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MalaysiaGabenor BNM

Lo 14 Tool of Monetary Policy

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