Understanding the central bank's legal system
This article highlights the central bank's financial system in accordance with the Central Bank and Banking Law, which aims to achieve monetary and financial stability. The law sets out rules for managing resources and liabilities, emphasizing transparency and governance. It also clarifies that the bank's fiscal year begins together with that of the state, and mandates the bank to issue a monthly statement of its financial position. The law specifies the conditions for providing emergency financing to banks with low solvency or experiencing insolvency, requiring such financing to be collaterally secured, backed by adequate guarantees, and offered at an interest rate higher than the market average. Furthermore, the law prohibits financing banks in liquidity shortage situations unless the same conditions are met. Its overall goal is to maintain the stability of the monetary and banking system by issuing and managing currency, establishing monetary policies and exchange rates, conducting open market operations, supervising financial institutions, managing banking sector risks, settling the affairs of insolvent banks, and protecting customers' rights.
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