Question

1)Correctly identify whether these would be assets, liabilities, or neither on a central bank’s balance sheet.

Currency in Circulation-

Repurchase Agreements (provided to counterparty)-

Reverse Repurchase Agreements (provided to counterparty)-

Bonds and Debt Securities-

Property/Real Estate-

Loans-

Currency/Liquidity Swaps-

Foreign Currency and Gold Reserves-

Reserve Deposits (required and excess/other)-

Answer 1

Ans.1. Currency-in-circulation = Current Liabilties on a central bank's balance sheet.

As Central bank issued Currency and the same will be paid equivalent amount when somebody bring this currency.

Ans.2. Repurchase Agreements = Current Assets on a central bank's balance sheet.

As central bank considered its as a loan, it involves the sale of an assets and taken as a colleteral.

Ans.3.Reverse Repurchase Agreements = Current Assets on a central Bank's balance sheet.

it is also consider as a same financial transactions in which one party repurchase the sale asset.

Ans.4. Bond and Debt securities: Current assets on a central bank's balance sheet.

It is a marketeable securities as it is considered as a current assets.

Ans.5.Property and Real estate = Neither on a central bank's balance sheet.

It is a fixed asset as central bank's can't consider it in its balance sheet.

Ans.6.Loans = Current Liabilities.

Loan can be short-term or long-term. it is considered as part of balance sheet.

Ans.7. Currency Swaps/ liquidity swaps = Current liabilites

Central bank has to take Currency swap/ liquidity swap as a liability due to different value of currency.

Ans.8. Foreign Currency and Gold reserves: Current Liabilities.

Central bank's always has kept foreign currency and gold as a reserves,then reserves is considered as a liability.

Ans.9. Reserve Deposits = Current liabilities.

Central bank's always considered reserve deposits as a liability..