RESERVE BANK Meaning and
Definition
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A reserve bank, also referred to as a central bank or a monetary authority, is a financial institution responsible for overseeing and managing a country's money supply, monetary policy, and the banking system. It typically acts as a bank for the government and commercial banks within its jurisdiction.
The primary objective of a reserve bank is to maintain stability and control over the country's currency and financial system. It does so by regulating interest rates, setting monetary policy, and controlling the amount of money circulating in the economy. Through its monetary policy decisions, a reserve bank aims to achieve price stability, promote economic growth, and minimize inflationary pressure.
Reserve banks play a crucial role in ensuring the stability of the financial system by acting as a lender of last resort to commercial banks. They provide liquidity to banks during financial crises, prevent bank runs, and oversee the soundness and stability of the banking sector.
Additionally, reserve banks often act as the government's fiscal agent by managing the country's foreign exchange reserves, conducting foreign currency exchange operations, and issuing and managing national currency. They also supervise commercial banks, ensure compliance with banking regulations, and maintain financial stability.
The policies and actions of a reserve bank have far-reaching effects on an economy. They impact interest rates, exchange rates, inflation, employment, and overall economic growth. Reserve banks are typically autonomous or quasi-autonomous institutions, tasked with making independent decisions to safeguard the stability of the financial system and ensure the overall health of the economy.
Common Misspellings for RESERVE BANK
- eeserve bank
- deserve bank
- feserve bank
- teserve bank
- 5eserve bank
- 4eserve bank
- rwserve bank
- rsserve bank
- rdserve bank
- rrserve bank
- r4serve bank
- r3serve bank
- reaerve bank
- rezerve bank
- rexerve bank
- rederve bank
- reeerve bank
- rewerve bank
- reswrve bank
Etymology of RESERVE BANK
The term "reserve bank" has its etymology rooted in the combination of two distinct words: "reserve" and "bank".
1. Reserve:
The word "reserve" originates from the Latin noun "reservare", which means to keep back, to save, or to preserve. Over time, the term evolved and in the early 17th century, it started to be used specifically in economic contexts to refer to a portion of a resource, such as money or goods, that is set apart or kept for future use or emergencies.
2. Bank:
The word "bank" can be traced back to the Italian word "banco", meaning a bench or a table used by medieval money changers and lenders. These moneylenders used to conduct their businesses while sitting behind their tables in public places. Eventually, the word "bank" was adopted to describe not only the physical table but also the institution itself.
Similar spelling words for RESERVE BANK
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