Theory question 108
Financial InstitutionsSection B: answer three questions only from this section.
Describe any five functions of the Central Bank of Nigeria (CBN)
Show the model answer
Model answer
Issues the national currency
Banker to the government: keeps its accounts and advises it
Banker to commercial banks (bankers' bank)
Lender of last resort to banks
Controls money supply and credit through monetary policy (open market operations, bank rate, reserve requirements, special deposits)
Manages the country's foreign reserves and exchange rate
Manages the public debt
Supervises and regulates banks and other financial institutions
Clearing house for cheques
Explanation
Five functions, each described.