Answer to Question #237013 in Macroeconomics for Nash

Question

Explain with the aid of a graph how the South African reserve bank(SARB) can determine the quantity of money by controlling the interest rates?

Answer 1

South African reserve bank can utilize refinancing system in conducting its monetary policy. The refinancing system assists in meeting day to day needs of commercial banks. The refinancing system accommodates loan requests as it regulates amount of money by interest rate and credit cost variations.