0 votes
in Revision by

 In which ways may the Central Bank use to reduce the amount of money in circulation?

Tools of monetary control 

1 Answer

0 votes
by (117k points)

Ways Central Bank may use to reduce the amount of money in circulation include;

  • Increase in the bank rate
  • Buying of government securities in the open market
  • Increase cash or liquidity ratio
  • Increase in compulsory deposit requirement
  • Selective credit control
  • Reduce margin requirement
  • Request commercial banks to control credit
Welcome to Kenyayote Q&A, where you can ask questions and receive answers from Kenyayote staff and other members of the community.

Before you ask, search the website to make sure your question has not been answered.
If you are ready to ask, provide a title about your question and a detailed description of your problem.
...