International School of Business & Media

(Batch 2024-26)
Section: E

Finance Assignment-2

Submitted To: Dr. Manoj Sharma

Vishnu Malkan-MNP20242130
List of Central Banks Around the World

Country Bank
India Reserve Bank of India
Austria European Central bank
USA Federal Reserve
Australia Reserve Bank of Australia
UK Bank of England
Argentina Central Bank of Argentina
Switzerland- Swiss National Bank
Afghanistan Bank of Afghanistan
South Africa- South African Reserve Bank
Iran CentralBank of Islamic Rep. of Iran
Bangladesh – Central Bank of Bangladesh
Indonesia Bank Indonesia
Azerbaijan- Central Bank of the Rep. of Azerbaijan
Iceland Central Bank of Iceland
Hungary Central Bank of Hungary
Guinea Central Bank of the Rep. of Guinea
Greece European Central Bank
Pakistan State Bank of Pakistan
Vietnam State Bank of Vietnam
Uzbekistan Central Bank of the Rep. of Uzbekistan
UAE Central Bank of United Arab Emirates
Turkey Central Bank of Republic of Turkey
Thailand Bank of Thailand
Tajikistan National Bank of Tajikistan
Taiwan Central Bank of the Rep. of China
Canada Bank of Canada
Sweden The Riksbank
Sri Lanka Central Bank of Sri Lanka
China People’s Bank of China
Chile Central Bank of Chile
Chad Commercial Bank Chad
Cambodia National Bank of Cambodia
Brazil Central Bank of Brazil
Bolivia Central Bank of Bolivia
Bhutan Royal Monetary Authority of Bhutan
Bermuda Bermuda Monetary Authority
Spain European Central Bank
South Korea Bank of Korea
Slovenia European Central Bank
Singapore Monetary Authority of Singapore
Seychelles Central Bank of Seychelles
Saudi arabia Saudi Arabian Monetary Authority
Russia Bank of Russia
Qatar Qatar Central Bank
Philippines BangkoSentral ng Pilipinas
Peru Central Reserve Bank of Peru
Papua New Guinea Bank of Papua New Guinea
New Zealand Reserve Bank of NewZealand
Netherlands European Central Bank
Myanmar Central Bank of Myanmar
Korea Republic Bank of Korea
Kenya Central Bank of Kenya
Kazakhstan National Bank of Kazakhstan
Jorda Central Bank of Jordan
 Japan Bank of Japan
Italy European Central Bank
Ireland European Central Bank
Iraq- Central Bank of Iraq Central Bank of Iraq
Morocco Bank of Morocco
Mongolia Bank of Mongolia
Mexico Bank of Mexico
Mauritius Central Bank of Mauritius
Mali Central Bank of West African States
Maldives Maldives Monetary Authority
Malaysia Bank Negara Malaysia
Libya Central Bank of Libya
Ghana Bank of Ghana
Germany European central bank
Georgia National Bank of Georgia
France European Central Bank
Finland European Central Bank
Fiji Reserve Bank of Fiji
Egypt Central Bank of Egypt
Denmark National Bank of Denmark
Cyprus European Central Bank

Top Central Banks around the World

Reserve Bank of India
Headquarters: Mumbai, Maharashtra
The Reserve Bank of India, abbreviated as RBI, is India’s Central Bank and
regulatory body responsible for regulation of the Indian banking system. Owned
by the Ministry of Finance, Government of India, it is responsible for the
control, issue and maintaining supply of the Indian rupee. It also manages the
country's main payment systems and works to promote its economic
development.

Monetary Policy states the use of financial instruments under the control of the
Reserve Bank of India to achieve the ultimate objective of economic policy
mentioned in the Reserve Bank of India Act, 1934 which is to standardise
magnitudes such as availability of credit, interest rates, and money supply.
Objective of the Monetary Policy
The primary goal of monetary policy is to maintain price stability while
pursuing growth. Price stability is an essential prerequisite to sustainable
growth.
The Monetary Policy Process
Section 45ZB of the amended RBI Act, 1934 also provides for the establishment
of an empowered six-member monetary policy committee (MPC) by
notification in the Official Gazette by the Central Government.
Process:
1. The Monetary Policy Committee (MPC) is constituted by the Central
Government to frame monetary policy.
2. Objective: To determine the policy interest rate required to achieve the
inflation target.
3. Members: MPC consists of 6 members.
4. Monetary Policy Department (MPD): Assists the MPC.
5. Rate cut or hike: Views of key stakeholders in the economy, and the
analytical work of the Reserve Bank contribute to the process of arriving
at the decision on the policy repo rate.
6. The Financial Market Committee (FMC): Meets daily to review the
liquidity conditions so as to ensure that the operating target of monetary
policy (weighted average lending rate) is kept close to the policy repo
rate.
Monetary policy Instruments
These are also called ‘instruments of credit control’. These instruments are used
to decrease the supply of money when there is an inflationary spiral in the
economy and to increase the supply of money when there is a deflationary spiral
in the economy.
1. Bank Rate
2. Liquidity Adjustment Facility (LAF)
3. Repo Rate
4. Reverse Repo Rate
5. Open Market Operations (OMOs)
6. Cash Reserve Ratio (CRR)
7. Statutory Liquidity Ratio (SLR)
8. Corridor
9. Market Stabilisation Scheme (MSS)
 Current rates of Monetary policy of RBI
The Reserve Bank of India held its 6th and final Monetary Policy Committee
(MPC) meeting for the fiscal year 2021-22 on February 8-10, 2022. The MPC’s
next meeting is slated for April 6-8, 2022.
Bank rates and the Marginal Standing Facility (MSF) rate remain unchanged:
• 4.00 percent policy repo rate
• 3.35 percent reverse repo rate
• 4.25 percent marginal standing facility rate
• 4.25 percent bank rate
• 4 percent CRR
• 18.00 percent SLR

Fiscal Policy:
The three main elements/objectives of fiscal policy in India
1. Price stability: It regulates the country’s price level so that prices can be
adjusted when inflation becomes too high.
2. Full employment: It tries to reach 100 % employment, or near 100 %
employment, as a means of regaining economic activity following a
period of low activity.
3. Economic growth: It aids in the maintenance of the economy’s growth
rate, allowing specific economic goals to be met.
The following methods are used to achieve the stated objectives:
• Consumption Control
• Increasing the investment rate.
• Building infrastructure and its development as well as taxation.
• Progressive taxation.
• The underprivileged groups are exempt from paying taxes.
• Excessive VAT on high-end items.
 • Preventing unearned income.
Fiscal Policy’s Significance in India:
• Fiscal policy, in a nation like India, is critical in increasing capital
formation in both the private and public sectors.
• The fiscal policy is intended to mobilise a significant amount of resources
towards financing its varied programmes through taxes.
• Fiscal policy also contributes to raising the savings rate by providing
stimulation.
• Fiscal policy strives to reduce the imbalance in the distribution of income
and wealth by providing enough incentives to the private sector to grow
its operations.

Federal Reserve: USA

Headquarters: Washington DC, USA
The Federal Reserve System (often shortened to the Federal Reserve, or simply
the Fed) is the central banking system of the United States. It was created on
December 23, 1913, with the enactment of the Federal Reserve Act, after a
series of financial panics (particularly the panic of 1907) led to the desire for
central control of the monetary system in order to alleviate financial crises.

Monetary Policy:
The Federal Reserve's monetary policy is a set of actions and communications
that aim to achieve the economic goals set by Congress:
• Stable prices: The Fed targets an average annual inflation rate of 2%.
• Maximum employment: The Fed aims to achieve the highest level of
employment while maintaining a stable inflation rate.
• Moderate long-term interest rates: The Fed works to achieve moderate
long-term interest rates.

The Fed uses three main tools to control monetary policy:

 • Open market operations: Controlled by the Federal Open Market
Committee
• Discount rate: Controlled by the Board of Governors of the Federal
Reserve System
• Reserve requirements: Controlled by the Board of Governors of the
Federal Reserve System

The Fed's monetary policy affects many aspects of the economy, including:
• Interest rates: The Fed's main monetary policy tool is its target for the
federal funds rate, which affects other interest rates.
• Stock prices: The Fed's monetary policy indirectly affects stock prices.
• Currency exchange rates: The Fed's monetary policy indirectly affects
currency exchange rates.
• Spending, investment, production, and employment: The Fed's monetary
policy influences these economic variables.

Fiscal Policy:
The Federal Reserve (Fed) does not set fiscal policy, but it does consider the
effects of fiscal policy on monetary policy. In the U.S., fiscal policy decisions
are determined by Congress and the Administration; the Fed plays no role in
determining fiscal policy.

Swiss National Bank: Switzerland

Headquarters: Bern and Zurich, Switzerland

Monetary Policy:
The SNB’s monetary policy strategy consists of three elements: a definition of
price stability, a medium-term inflation forecast and the SNB policy rate.

The Swiss National Bank implements its monetary policy by setting the SNB
policy rate. In so doing, it seeks to keep the short-term Swiss franc money
market rates close to the SNB policy rate.
Instruments used by Swiss National Bank:
1) Interest on sight deposits- By remunerating sight deposits, the SNB
influences the interest rate level on the money market, so that the secured short-
term Swiss franc money market rates remain close to the SNB policy rate. The
SNB uses a system of tiered remuneration. This encourages liquidity
redistribution between sight deposit account holders and thereby promotes an
active money market.
2) Open market operations- Open market operations include repo transactions,
the issuance, purchase and sale of its own debt certificates (SNB Bills), and
foreign exchange transactions. They serve primarily to manage liquidity in order
to keep the short-term money market rates in Swiss francs close to the SNB
policy rate.
3) Standing facilities- In the case of standing facilities, the SNB only sets the
conditions under which eligible counterparties can, on their own initiative, draw
liquidity. Standing facilities include the intraday facility, the liquidity-shortage
financing facility and the SNB COVID-19 refinancing facility (CRF). During
the day, the SNB provides its counterparties with interest-free liquidity (intraday
facility) through repo transactions so as to facilitate the settlement of payment
transactions. The funds received must be repaid by the end of the same bank
working day at the latest.

Fiscal Policy:
• In 2024, Switzerland's fiscal surplus is projected to remain around 0.5%
of GDP. The confederation will use consolidation measures to meet the
debt-brake rule. However, spending on defense, infrastructure, and
demographics is expected to remain high.
• A temporary amendment of the Financial Budget Act extended the
deadline for amortization to 2035, with the option of further prolonging to
2039, if necessary.
• The broadly unchanged fiscal stance is appropriate as it balances the need
to avoid impeding the ongoing modest recovery, while creating fiscal
space to address accumulating spending pressures.

South African Reserve Bank

Headquarters: Pretoria
The South African Reserve Bank (SARB) is the central bank of South Africa. It
was established in 1921 after Parliament passed an act, the "Currency and Bank
Act of 10 August 1920", as a direct result of the abnormal monetary and
financial conditions which World War I had brought. The SARB was only the
fourth central bank established outside the United Kingdom and Europe, the
others being the Federal Reserve, Bank of Japan and Bank of Java.

Monetary Policy:
The South African Reserve Bank (SARB) implements monetary policy to
protect the value of the rand by using inflation targeting and a tiered-floor
system:
• Inflation targeting
• Tiered-floor system
• Repo rate
The SARB also has other responsibilities, including:
• Financial stability
• Prudential regulation
• Financial markets
• Financial surveillance
• Payments and settlements
• Statistics
• Research
• Banknotes and coin
Fiscal Policy:
The government's fiscal policy aims to support:
• Structural reforms
• Long-term growth
• Employment creation
• Equitable income distribution
The SARB's fiscal framework includes a nominal expenditure ceiling that's
adjusted annually to maintain real fiscal expenditures at a comparable level to
when the ceiling was adopted in 2012. The ceiling is non-binding, meaning it
can be adjusted to reflect the fiscal stance or other government priorities.

Central Bank of United Arab Emirates

Headquarters: Abu Dhabi
The Central Bank of the United Arab Emirates is the state institution responsible
for managing the currency, monetary policy, banking and insurance regulation
in the United Arab Emirates

Monetary Policy:
The Central Bank of the United Arab Emirates (CBUAE) uses the Dirham
Monetary Framework (DMF) to formulate its monetary policy. The CBUAE's
monetary policy tools include:
• Managing the Dirham exchange rate
• Managing money markets
• Standing Credit Facilities
• Liquidity Insurance
• Open Market Operations.
The CBUAE also intervenes in the foreign exchange market to maintain the
stability of the UAE Dirham peg against the US dollar.
The CBUAE's other functions include:
• Issuing currency
• Organizing licensed financial activities
• Setting standards to protect consumers of licensed financial institutions
• Monitoring the credit condition in the state
• Managing foreign reserves
• Regulating the financial infrastructure systems
• Regulating the insurance sector
Fiscal Policy
The Central Bank of the United Arab Emirates (CBUAE) is responsible for
monetary policy, not fiscal policy.

People’s Bank of China

Headquarters: Beijing, Shanghai
The People's Bank of China is the central bank of the People's Republic of
China. It is responsible for carrying out monetary policy as determined by the
People's Bank Law and the Commercial Bank Law.

Monetary Policy:
The monetary policy stance is accommodative, providing financial support for
the continuous economic recovery.
In terms of the aggregates of monetary policy, the PBOC has adopted a variety
of monetary policy instruments, such as cutting the required reserve ratio and
policy rates, and bringing down market rates such as the loan prime rates (LPR),
which created a favourable monetary and financial environment for the high-
quality development of the economy.
Concerning the structure of money and credit, the PBOC gave full play to the
role of macro-prudential policies and structural monetary policy instruments.
Regarding the transmission of monetary policy, the PBOC have made efforts in
regulating market behaviors, making better use of existing low-
efficient financial resources, enhancing the efficiency of fund use, thus
smoothing the transmission of monetary policy.
The RMB exchange rate has remained basically stable in complicated
circumstances.

Fiscal Policy:
Monetary and Fiscal Synchronization: The PBOC often works in tandem with
fiscal authorities to achieve broader macroeconomic goals. For instance, the
PBOC might lower interest rates or adjust reserve requirement ratios to
complement fiscal stimulus efforts.
Debt Sustainability and Inflation Control: While fiscal policy expands
government spending, the PBOC helps manage inflation and ensures that the
liquidity created by fiscal actions doesn't lead to asset bubbles or excessive
inflation.

Monetary Authority of Singapore

Headquarters: 10 Shenton Way, MAS Building, Singapore
The Monetary Authority of Singapore or (MAS), is the central bank and
financial regulatory authority of Singapore. It administers the various statutes
pertaining to money, banking, insurance, securities and the financial sector in
general, as well as currency issuance and manages the foreign-exchange
reserves. It was established in 1971 to act as the banker to and as a financial
agent of the Government of Singapore.
Monetary Policy:
The Monetary Authority of Singapore's (MAS) monetary policy focuses on
managing the Singapore dollar's nominal effective exchange rate (S$NEER) to
achieve price stability:
• S$NEER
• Policy band
• Basket of currencies
In Singapore, the exchange rate has a stronger influence on inflation than
interest rates because of the country's small size and open economy.

MAS’ role and objective in monetary policy

The Monetary Authority of Singapore (MAS) is Singapore’s central bank and
conducts monetary policy to maintain price stability conducive to sustainable
growth of the economy.

MAS’ monetary policy implementation entails ensuring that the Singapore

Dollar Nominal Effective Exchange Rate (S$NEER)—which is MAS’
intermediate target of monetary policy—is kept within the boundaries of the
policy band.

The primary tool for managing the S$NEER is intervention operations in the
spot foreign exchange (FX) market.

FX intervention operations involve the sale or purchase of US$ against the S$.
S$-US$ intervention is the preferred operation since this is by far the most
liquid S$ currency pair traded.

In the process of monetary policy implementation, MAS accumulates or

expends Official Foreign Reserves (OFR) leading to changes in the size of
MAS’ balance sheet.

Fiscal Policy:
Singapore's fiscal policy is generally guided by long-term considerations. The
country has a healthy fiscal position and consistent budget surpluses, which has
resulted in a high level of foreign reserves and the strongest sovereign credit
rating in Asia.
The MOF's fiscal policy aims to:
• Promote long-term economic growth
• Build a better Singapore through partnerships between the
government, businesses, and community
• Create a progressive fiscal system that supports social mobility and
uplifts the vulnerable

European Central Bank

Headquarters: Frankfurt, Germany
The European Central Bank is the central component of the Eurosystem and the
European System of Central Banks as well as one of seven institutions of the
European Union. It is one of the world's most important central banks with a
balance sheet total of around 7 trillion

Monetary Policy:
The European Central Bank's (ECB) monetary policy aims to maintain price
stability by keeping inflation low, stable, and predictable. The ECB's main tools
for achieving this include:
• Key interest rates
The ECB uses open market operations, minimum reserve requirements, and
standing facilities to steer these rates.
• Forward guidance
The ECB announces its intentions for the path of key interest rates and the
duration of its asset purchase program.
• Negative interest rate policies (NIRP)
The ECB introduced these policies after the financial crisis to respond to new
challenges.
• Targeted longer-term refinancing operations
The ECB introduced these policies after the financial crisis to respond to new
challenges.
• Broad asset purchase program
The ECB introduced this program after the financial crisis to respond to new
challenges.
The ECB's medium-term inflation target is 2%. The ECB views inflation that is
too low as negatively as inflation that is too high. The ECB makes monetary
policy decisions every six weeks, and the President and Vice-President explain
the decisions in a press conference.

Fiscal Policies:
The need for fiscal discipline is even stronger in a monetary union, such as the
euro area, which is made of sovereign states that retain responsibility for their
fiscal policies. There are no longer national monetary and exchange rate policies
to respond to country-specific shocks, and fiscal policies can better cushion
such shocks if they start from a sound position.
A number of institutional arrangements for sound fiscal policies have been
agreed at the EU level, also with a view to limiting risks to price stability.
 • the prohibition of monetary financing (Article 123 of the Treaty on the
Functioning of the European Union),
• the prohibition of privileged access to financial institutions (Article 124
of the Treaty on the Functioning of the European Union),
• the no-bail-out clause (Article 125 of the Treaty on the Functioning of the
European Union),
• the fiscal provisions to avoid excessive government deficits (Article 126
of the Treaty on the Functioning of the European Union, including the
excessive deficit procedure), and
• the Stability and Growth Pact (secondary legislation based on Articles
121 and 126 of the Treaty on the Functioning of the European Union).

Additionally, the fiscal compact (as part of the Treaty on Stability, Coordination
and Governance in the Economic and Monetary Union) foresees the
implementation of a balanced budget rule at the national level and a further
strengthening of the excessive deficit procedure within the Stability and Growth
Pact.

Bank of Japan
Headquarters: Tokyo, Japan

The Bank of Japan is the central bank of Japan. The bank is often called
Nichigin for short. It is headquartered in Nihonbashi, Chūō, Tokyo.
The bank is a corporate entity independent of the Japanese government, and
while it is not an administrative organisation of the state, its monetary policy
falls within the scope of administration. From a macroeconomic perspective,
long-term stability of prices is deemed crucial. However, the political sector
tends to favour short-term measures. Thus, the bank's autonomy and
independence are granted from the standpoint of ensuring long-term public
welfare and political neutrality.

Monetary Policy:
The Bank's Policy Board decides on the basic stance for monetary policy at
MPMs. The Policy Board discusses the economic and financial situation and
then decides an appropriate guideline for money market operations at MPMs.
After every MPM, the Bank releases its assessment of economic activity and
prices as well as the Bank's monetary policy stance for the immediate future, in
addition to the guideline for money market operations.
According to the guideline for money market operations decided at MPMs, the
Bank controls the amount of funds in the money market, mainly through money
market operations.

Fiscal Policy:
The Bank of Japan is responsible for monetary policy, not fiscal policy

Central Bank of Russian Federation

Headquarters: Moscow, Russia

The Central Bank of the Russian Federation, which brands itself as Bank of
Russia and is also commonly referred to in English as the Central Bank of
Russia is the central bank of the Russian Federation. The bank was established
on July 13, 1990.It claims the legacy of the State Bank of the Russian Empire
and of the Soviet Gosbank , even though both institutions covered a significant
larger territorial scope.

Monetary Policy:
Monetary policy is a part of state economic policy aimed at improving Russian
citizens’ welfare. Its priority is to ensure price stability, that is, sustainably
low inflation.
The Bank of Russia maintains inflation close to the target of 4%. Such a policy
is called inflation targeting. The main instrument of monetary policy is the key
rate. The key rate is the interest rate on loans extended to commercial banks by
the central bank and on deposits it accepts from them. A change in the key rate
impacts demand through interest rates in the economy and, ultimately, inflation.
In making its decisions, the central bank relies on the macroeconomic forecast
and factors in the situation in the economy and financial markets.

Main principles of monetary policy

• The Bank of Russia sets a permanent public quantitative inflation target
• The inflation targeting regime involves a floating exchange rate
determined by supply and demand in the currency market
• The key rate is the main instrument of the Bank of Russia’s monetary
policy.
• The Bank of Russia makes its monetary policy decisions relying
on the macroeconomic forecast and the analysis of a wide range of data.
• The Bank of Russia follows the principle of monetary policy transparency
so as to enhance the understanding of and confidence in its current
monetary policy and to create a predictable economic environment
for all economic agents.

Fiscal Policies:
The Bank of Russia's fiscal policy is expected to remain unchanged in 2024 and
beyond. However, changes to fiscal policy may require the Bank of Russia to
adjust its monetary policy parameters.
Bank of Russia's fiscal policy

Goal Maintain price stability through inflation targeting

Inflation target 4% annual inflation

Key instrument Key rate, which is the interest rate on the Bank of Russia's
main operations

Key rate decisions The Bank of Russia's Board of Directors makes key rate
decisions eight times a year
Key rate The Bank of Russia releases a press release and the
announcements Governor holds a press conference after each key rate
meeting

Macroeconomic The Bank of Russia publishes a medium-term

forecasts macroeconomic forecast four times a year