Page 5 - Material about Central bank

The Role Of Bank Central

Functions and Roles of the Central Bank are :

1. Issuance and Circulation of Money
2. Most countries today issue money through central banks each of these countries.
3. The money printed has the signature of the Governor/Chairman of the Central Bank and
Minister of Finance in each country.
4. Central banks in some countries can now print money by make credits to commercial bank
accounts registered in the financial system electronic banking.
5. Process money printed by the Central Bank (both electronic and physical) through the
money creation process. This process will affect circulation economy.
6. The role of the central bank in determining the direction of monetary policy is due to The
central bank is the only authority that has the right to issue money and is capable of it
controlling reserve requirements.
7. As a payment system regulator, the central bank sets regulations and guidance regarding
payment systems.
8. The objectives of the central bank as a regulator include, among others.
9. Reduce the possibility of payment system failure.
10. Increase the efficiency of the payment system.
11. Ensure fairness in the use of payment systems.
12. As a provider of payment system facilities, the central bank has a role important especially
in interbank payment systems.

Function Of Bank Indonesia as Bank Central

a) Determination and Implementation of Monetary Policy: Bank Indonesia is responsible for
establishing and implementing monetary policy aimed at achieving stability in the value
of the rupiah and controlling inflation.
b) Payment System Regulation: Bank Indonesia is tasked with supervising and regulating
the national payment system, including the clearing system and interbank transfers.
c) Regulation and Supervision of Financial Institutions: Bank Indonesia has the authority to
regulate and supervise financial institutions in Indonesia, including commercial banks,
insurance companies and other non-bank financial institutions.
d) Foreign Exchange Reserve Management: Bank Indonesia is responsible for managing the
country's foreign exchange reserves in order to support the stability of the rupiah
exchange rate.
e) Money and Currency Management: Bank Indonesia has the authority to issue and
circulate banknotes and coins in Indonesia.

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