Central Bank of Anikatia
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| Headquarters | Antiytia, Anikatia | ||
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| Established | Feburary 24, 1952 | ||
| Governor | Hwan Byeong-man | ||
| Central bank of | Anikatia | ||
| Currency | Anikuro AKO (ISO 4217) | ||
| Website | www.cba.co.ank | ||
The Central Bank of Anikatia (Anikatian: 안니카탸 중앙 은행; Annikatya Jung-ang Eunhaeng), is the central bank of Anikatia and issuer of Anikuro. It was established on Feburary 24, 1952 in Antiytia, Anikatia.
History
The Central Bank of Anikatia was established on Feburary 24, 1952 under the Central Bank of Anikatia Act.
Following end of the Great Eastern War, the Anikatian economy was plunged into turmoil. Tackling the severe inflation and financial disorder brought about by an acute shortage of resources following the end of the conflict was the immediate priority.
In this situation, discussions raged across the country on establishing a central bank for the Republic of Anikatia and top specialists were, dispatched from the Bank of Belfras, drafted the Central Bank of Anikatia Act.
Based on this draft, the Central Bank of Anikatia Act was passed in January 1952 and the Bank launched its operations as a central bank on Feburary 24, 1950. It was given a wide range of functions in relation to monetary & financial policy, bank supervision, and foreign exchange policy.
Primary Purpose
The primary purpose of the Bank is to pursue price stability.
Under the Central Bank of Anikatia Act (Article 1), the primary purpose of the Bank is pursuing price stability so as to contribute to the sound development of the national economy. The Central Bank of Anikatia implements this target through adjustments to its reference interest rate, the Base Rate.
The purchasing power of money depends on prices. When prices rise, the same amount of money buys less than before. Therefore, it is naturally the task of a central bank to safeguard the value of the money by keeping inflation low.
Prices are influenced by various factors such as corporate investment, household consumption and international prices of raw materials. Meanwhile, among the various policy instruments to bring about price stability, the monetary policy of a central bank, which adjusts the quantity of money in circulation, is the most effective.
For these reasons, the responsibility for price stability is given to central banks in most countries. The Bank sets and announces an inflation target for a certain period and strives to meet this target.
Functions
Issuing Banknotes and Coins
The Central Bank of Anikatia has the exclusive right to issue banknotes and coins in the Republic of Anikatia. Their dimensions, designs and denominations are determined by the Monetary Policy Committee with Government approval. The banknotes and coins thus issued have the status of legal tender within the country for all transactions, both public and private, without limitation.
Currently, there are four different denominations of banknotes in circulation: ₳1,000, ₳5,000, ₳10,000 and ₳50,000
and coins in four : ₳10, ₳50, ₳100 and ₳500.
Conducting Monetary and Credit Policy
The most important mission of the Central Bank of Anikatia is formulating and implementing monetary and credit policy. This is a process of controlling the supply or cost of money in order that the economy may grow in a sound manner on the basis of price stability. To this end, the Bank conducts monetary and credit policy with an emphasis on price stability while taking into consideration such matters as economic growth and financial market stability.
In order to achieve the ultimate goal of maintaining price stability, the Monetary Policy Committee of the Bank sets the Base Rate every month after overall consideration of price movements, economic activity and financial market conditions. Then the Bank steers the call rate to converge on the newly-set level of the Base Rate using its policy instruments. The change in the call rate affects market interest rates such as yields on CDs and Treasury bonds, and banks' deposit and loan interest rates. These changes in interest rates tend to influence consumption and investments and, as a result, inflation.
The Bank's monetary policy is conducted mainly through open market operations, apart from which the Bank uses lending and deposit facilities and reserve requirements policy.