What is the relationship between a central bank and the government?
Asked 7 months ago
The relationship between a central bank and the government is usually one of close collaboration and coordination. Central banks are typically established by governments to act as the country's monetary authority. They are responsible for formulating and implementing monetary policies that help achieve the government's economic objectives, such as controlling inflation, stabilizing the currency, and promoting economic growth. Central banks and governments work together to achieve these goals and address any economic challenges that may arise. While central banks operate independently, they often consult with the government regarding policy decisions to ensure alignment with fiscal policies. Additionally, governments may provide the central bank with certain powers and responsibilities, such as regulating commercial banks and overseeing the financial system. This cooperative relationship helps maintain financial stability and enables effective monetary governance.
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