Question

Identify and briefly describe the ways that may be used by the Central Bank of Oman to influence money supply.  

please should be clear

Answer 1

Ways which can be used by Central Bank of Oman to influence the money supply in the economy as follows-

A.Central Bank of Oman can cut the interest rate in order to influence the money supply in the economy and it can also raise the interest rate in order to influence the money supply in the economy

B. Central Bank of Oman can influence the money supply in the economy through open market operation by providing up with more government securities to the commercial banks or buying out the government securities from the commercial banks.

C. Central Bank of Oman can change the Reserve requirement ratio of different banks in order to increase the landing capacity of the bank and decrease the landing capacity of the bank.

D. Central Bank of Oman can also change the cash reserve ratio and statutory liquidity ratio in order to impact the money supply into the overall economy.

these are the few of the methods which can be adopted by the central bank of Oman to influence the money supply into the overall economy .