Through fact and examples discuss the role central banks play in setting and monitoring general macroeconomic and monetary policy. How does the Central Bank of the Bahamas compare to the Federal Reserve System in the US.

The primary function of a central bank is to manage the nation's money supply through implementing monetary policies, through active duties such as managing interest rates, setting the reserve, and acting as a resort to the banking sector during times of bank insolvency or financial. The role of central banks also stem to determining controlling the nation's entire money supply, managing the country's foreign exchange and gold reserves and the Government's stock register, regulating and supervising the banking industry, setting the official interest rate used to manage both inflation and the country's exchange rate and ensuring that this rate takes effect via a variety of policy mechanisms. Central banks usually also have supervisory powers, intended to prevent bank runs and to reduce the risk that commercial banks and other financial institutions engage in reckless or fraudulent behavior. Though most central bank tailors the way they carry out these functions to the current economic situations of their country. All span into one common authoritative goal to maintain financial stability. Through monetary policy there is the establishment of goals such as high employment, price stability, Interest rate stability, financial market stability, foreign exchange market stability and economic growth. Through fact and example I shall relay how the central banks use monetary policy instruments such as reserve requirements, open market operations and the discount rate to manage the money supply and keeps it unwavering.

The reserve requirement is a central bank regulation that sets the minimum fraction of customer deposits and notes that