The purpose of the Central Bank
The sole purpose of the central bank (BI) is to achieve and maintain the stability of the value of the rupiah, which is reflected in the inflation rate and the development of the rupiah exchange rate against foreign currencies. The instrument used to achieve and maintain the stability of the rupiah's value can be referred to by the task of the World Bank as a central bank.
The Role of the Central Bank
The role of the central bank (BI) is to achieve and maintain the stability of the value of the rupiah, which is reflected in the inflation rate and the development of the rupiah exchange rate against foreign currencies. The instrument used to achieve and maintain the stability of the rupiah's value can be referred to by the task of the World Bank as a central bank.
Central Bank Function
The function of the central bank is regulated in Law No. 23 of 1999 concerning the World Bank.
It was stated that the aim of the World Bank through policies is to achieve and maintain the stability of the value of the rupiah which focuses on inflation and the rupiah exchange rate. The World Bank is commonly known as the bank of bank.
The Duties of the Central Bank
Whereas the task of the Central Bank in this case the World Bank which has been explained in Act No. 23 of 1999 are as follows:
Arranging money circulation by determining and operating according to monetary policy.
Make arrangements and encourage ease of payment and production systems.
Duties of the Central Bank Relating to the Government
Provision of credit to the government.
Regulate government treasury.
Assisting the auction process and selling government bonds.
Circulate money as a legal payment instrument.
Have full rights to the printing and production of money.
Has the sole right to print money.
Duties of the Central Bank in Banking
Determine interest rates.
As a banker.
Developing sound credit.
Coaching all existing banks.
Manage, control and expand the network and payment traffic.
Conduct support and encourage people to run productive businesses.
Central Bank Authority
World Bank's authority in the monetary sector, among others, are as follows:
To conduct monetary control, namely: open market operations, setting a discount rate, setting a minimum reserve requirement, and arranging credit or financing.
Determine monetary targets by considering the national inflation rate target.
Control policies related to finance. The intended financial policies are:
Application of discount policy.
Application of minimum reserve requirement.
Control of financing and credit.
Understanding financial management is quite diverse according to the party who interpret. According to Prof. Dr. Bambang Riyanto financial management is "all activities of the company concerned with the effort to get the funds needed by the company and businesses to use these funds as efficiently as possible". From the management aspect, this definition means that financial management involves the planning, analysis and control of the company's financial activities.