To be continued Rediscount facilities are one of the means by Which banks borrow funds from central bank Banks use immature commercial papers that have been discounted by themselves to obtain loans from central bank. and the central bank discounts the commercial papers for a second time the central bank can adjust the rediscount rate to affect the banks cost of borrowing money from the central bank, by means of which the central bank controls the money supply
To be continued Rediscount facilities are one of the means by which banks borrow funds from central bank. Banks use immature commercial papers that have been discounted by themselves to obtain loans from central bank, and the central bank discounts the commercial papers for a second time. The central bank can adjust the rediscount rate to affect the bank’s cost of borrowing money from the central bank, by means of which the central bank controls the money supply. 11
To be continued Central bank relending is a loan extended by central bank to financial institutions The central bank is able to adjust the money supply through varying relending rates
To be continued Central bank relending is a loan extended by central bank to financial institutions. The central bank is able to adjust the money supply through varying relending rates. 12
To be continued Open market operations are central bank's principal tool for implementing monetary policy. Through purchasing and selling government securities in the open market, a central bank largely determines the interest rates, by which banks lend the balances at the central bank to other banks and adjust the money supply in the banking system
To be continued Open market operations are central bank’s principal tool for implementing monetary policy. Through purchasing and selling government securities in the open market, a central bank largely determines the interest rates, by which banks lend the balances at the central bank to other banks and adjust the money supply in the banking system. 13
To be continued a question How monetary policy affects the economy
To be continued A question: How monetary policy affects the economy 14
To be continued A reduction in interest rates makes saving less attractive and borrowing more attractive, which stimulates spending LoWer interest rates can boost the prices a assets such as shares and houses Changes in interest rates can also affect the exchange rate Changes in spending feed through into output and, in turn, into employment 15
To be continued -- A reduction in interest rates makes saving less attractive and borrowing more attractive, which stimulates spending. -- Lower interest rates can boost the prices of assets such as shares and houses -- Changes in interest rates can also affect the exchange rate --Changes in spending feed through into output and, in turn, into employment 15