Give two reasons why the central bank enjoys monopoly of notes issue
Answers
The monopoly rights were given to central bank because it can have a control over the credits of the commercial banks through its monetary policy which includes various measures to control credit; it brings uniformity to the monetary system stating laws for the acceptance and usage of money and the management of paper ...
Central bank is an apex bank that controls the entire banking system of a country. It is the sole agency of issuing currency in the form of notes and coins in the country. The monopoly rights were given to central bank because it can have a control over the credits of the commercial banks through its monetary policy which includes various measures to control credit; it brings uniformity to the monetary system stating laws for the acceptance and usage of money and the management of paper money becomes easier due to the central banks as they design the paper notes with their seal on it so that it can not be counterfeited.