Tugas.

1
Bahasa Inggris Niaga 266

Nama : Ayu Aisiah Al Azzahra

Nim : 042534518

Please choose one of the topics below. Then, write an essay consisting of 3 paragraph.
Elaborate your own opinion with the references related to the topic that you choose.

2. The primary goal of central banks is to provide their countries' currencies with price
stability by controlling inflation. What will happen if a country does not have Central bank?

I will anser question number 2

The following are things that can happen if a country does not have a central bank:
It is difficult to achieve stability in the prices of goods and services.
Uncontrollable inflation rate.
The setting and implementation of chaotic monetary policy.
The instability of foreign currency exchange rates in Indonesia.
The risk of carrying out activities related to banking is increasing because there is no
supervision.
Discussion
The central bank is an institution that has the responsibility to oversee the monetary
system in a country. There are various things that the central bank must do, such as:
Maintain currency stability.
Keeping the inflation rate low.
Monitor job opportunities.
Establish and implement monetary policy.
Supervise and regulate banks operating within a country.
Organize and maintain the smooth running of the payment system.
The stability of the currency value, the stability of the banking sector, and the
financial system as a whole will decline and become unstable.
The central bank has a very strategic role for society in general and economic
development in particular. The most basic is its role in printing and circulating money.
The central bank is the only institution authorized to issue and circulate currency as
legal tender in a country. This role is vital because of the importance and breadth of
the function of money in the economy.
All economic and financial activities are carried out using money. The function of
money is not only used as a means of payment, but also as a medium for storing
wealth and even speculating for some people. The definition of money is not limited
to currency, namely banknotes and coins, but has developed into various forms and
variations along with the rapid developments in the financial sector, from demand
deposits, bank deposits, credit cards, and so on. So that the development of the money
supply will have a direct effect on economic and financial activities in the economy,
whether it is consumption, investment, export-import, interest rates, exchange rates,
economic growth, and also inflation.

With a role like this, it is natural that the central bank has a purpose and is given the
responsibility to achieve and maintain the stability of the value of the currency in
circulation. Especially in today's modern world when money is fiat money, in the
sense that the State authorizes the central bank to issue and circulate the money on the
basis of trust, without any obligation to provide a certain amount of gold or other
reserves as collateral for the issuance of the money as has been experienced. during
the gold standard. Therefore, the stability of the value of the currency is a
fundamental obligation for the central bank so that the confidence of the state and the
public can be maintained.

In practice, the stability of the value of the currency in question includes the stability
of the value of the currency against goods and services (measured and reflected in the
inflation rate) as well as stability against the currencies of other countries (measured
and reflected in the development of exchange rates or currency rates).

SUMBER : BMP/ADBI4201.266 - MODUL 1,2,3