Answer:
The core functions of BB are briefly discussed as
follows:
1. BB formulates and implements
monetary policy aiming at stabilizing domestic monetary value and maintaining
competitive external per value of taka for fostering growth and development of
country’s productive resources in the best national interest.
2. BB formulates and implements
intervention policies in the domestic money market and foreign exchange market.
BB intervenes the money market with some policy instruments such as
i.
Open market operation (Treasury Bills/Bonds, Repo, reverse Repo
Auctions)
ii.
Variations in Reserve Ratios such as cash reserve requirements (CRR)
and statutory liquidity ratio (SLR)
iii.
Secondary trading
iv.
Discounting rate/ bank rate and
v.
Moral suasion
3. BB monitors and supervises
scheduled banks and non-bank financial instructions (NBFIs) that include
off-site supervision and on-site supervision in order to enhance the safety,
soundness, and stability of the banking system to ensure banking discipline,
protect depositors’ interest and retain confidence in the banking system.
4. BB holds sole responsibility
of the management of international reserve representing aggregate of BB’s
holding of gold, foreign exchange SDR and reserve position in the IMF;
5. BB, as the central bank of Bangladesh
reserves sole responsibility to issue bank note.
6. BB performs as a clearing
house for the scheduled banks to clear and settle inter-bank payment arising
through drawing cheque, drafts, bills, etc to one another.
7. BB acts as a banker to the
government;
8. BB functions as a lender of
the last resort for the government as well as for the country’s scheduled
banks;
9. BB acts as an advisor to the
government;
10. BB directs the growth
expediting programs for the national interest.
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