Major Functions of the Central Bank in Zimbabwe
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The main function of the central bank in an economy is to issue notes and coins. The other function of the cental bank is that it is the lender of last resort. This so because it is expensive to borrow from the central bank than to borrow from other financial institutions. When bank is running short of money it first borrow among the other banks when it has exhorsted this option it will then approach the central bank as the last option.
The central bank also act as the bank to the Government. All the Government revenue collected from taxes and other sources is banked with the central bank and alll payments by the Government are drawn from the central bank.
The central bank also is the bankers bank which means all the commercial banks are required to keep an account with the central bank which are use for keeping the reserve requirements as well as for solving interbank indebtedness.
The central bank is also the keeper of a countrys foreign currency reserves and other foreign assets. It aslo manage a countrys external vaue of the currency and at the same time controls and supervise the operations of all the financial institutions. It is also responsible for formulating the monetary policy
Compared to the zimbabwe Central bank it was now operating as ministry in the Governmement. I was now involved in all the sector of the economy like purchasing inputs for agriculture, Paying salaries for civil service. Beside printing money which was the major contributer in the inflation in the Zimbabwean Economy and also it was now involved in the politics of the country.