- Issuing of currency. The central bank has the sole authority to issue the country’s currency that circulates within the country i.e. it is the one responsible to order for minting of coins and printing of bank notes that act as legal tender within the country.
- It acts as a banker to the government and government institutions i.e. it accepts the deposits from the government and safeguards such deposits as well as providing other banking services.
- It is a banker to commercial banks and other financial institutions i.e. it accepts and safeguards deposits from commercial banks and acts as a clearing house to settle inter-bank indebtedness.
- It acts as a banker to international agencies operating within the country e.g. IMF, Red Cross, F.A.O, UN agencies.
- It controls the amount of money in circulation. The central bank uses the tools of monetary policy to regulate the amount of money in circulation and ensure economic stability.
- It manages the country’s debt (public debt). The central bank is responsible for keeping an up-to-date profile/ record on the country’s total indebtedness.
- It advises the government on monetary and economic issues e.g. formulating budgets, taxation, devaluation and other economic policies.
- It is responsible for the control and supervision of all commercial banks and other financial institutions i.e. it ensures that peoples’ money is not at risk through close monitoring and supervision of these institutions.
- It acts a custodian of foreign reserves. The central bank acts as the manager of foreign reserves in the country.
- It regulates foreign exchange rates. The central bank is responsible for the day-to-day management of foreign exchange operations carried out by forex bureau.
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