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4.4.3: Role of Central Banks
Terms in this set (6)
Monetary authority and major regulatory bank in a country
Central Bank intervention
When a central bank enters the foreign exchange market to buy or sell currency in order to influence exchange rates.
Lender of Last Resort
When a central bank provides financial institutions with funds when they cannot borrow from the market.
Bank (Base) Rate
The interest rate charged to commercial banks by the central bank when banks need to borrow to improve their liquidity
When a central bank buys longer-term government bonds or other securities
Manipulation of the supply of money (QE), interest rates and exchange rates in order to influence output, prices and employment in the economy.
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