REFINANCING - A TOOL OR A RUDIMENT OF THE CENTRAL BANK?

Abstract

The study subject of this article is one of the most relevant instruments governing the activities of the central bank - refinancing. The purpose of this paper is to analyze the instrument in terms of its compliance with the essence of money in today's monetary system. Refinancing as a tool of the Central Bank came under “golden standard” monetary system, while under current conditions there is a fiduciary type of thesystem, involving the use of other instruments of market processes regulation. As a result, the study concludes that the current existing practice of refinancing is self-contradictory; it does not contribute to the equilibriumof the market development in the sphere of monetary circulation. The methods of research used in the article were the analysis and synthesis of organic consistency of the material, and some others. Results are meant for application in regulating activities of the Central Bank.

Keywords

• money
• money system
• the central bank
• the assets of the central bank refinancing rate of thecentral bank