Hi Emmanuel, others on this site may not agree with my answer, I don't know.

I don't think a Central Bank can help foster economic growth or employment. A Central Bank can try to maintain stable prices, but this is more difficult in small economies subject to exchange rate swings. Remember that CBs have a tool such as interest rates, but have many objectives. Tinbergen showed 65 years ago that only one objective can be stabilized with one tool. Stabilize prices is my advice. At least then it is easier for the economy to function more efficiently (because some uncertainty is removed). 

Thanks Sir, your input is very necessary as a vital premise to establish the grounds for accurate hypothesis

I agree with Peter I also want to add that in developing countries Central Banks are not immune to political pressure . Depending on the specifics of the country, some Central banks have resorted to unconventional monetary policy, adding another objective (which can be one of those listed, In that case they resort to the use of an additional tool(required reserve ratio for instance) 

Thanks Kathleen Dorsainvil for such a valuable input

Central Banks can stimulate development by lowering credit costs, encouraging flow of credit to certain sectors and ensuring banks operate prudently in the interest of the country.

Dear Murray, i have observed that, such your preposition especially in developing economy, has been more of idealist than realist.

Hi Emmanuel, this is a dificult topic.

From a cross border  point of view, even targeting financial or prices stability is a hot topic for a small country with a soft currency. I mostly agree with Peter (and Kathleen), first of all, one instrument one target,. But going deeper into the question, the trilemma is specially hard to handle for small countries. Even if you try to restrict financial flows or float your currency, monetary independence is a "mirage" in many cases.

I would also revisite other problems related (maybe this is also an opinable argument) including moral hazard (political), capture of the regulator (including the central bank), fragile complementarities (Central bank and international banks, central bank and government debt, local banks and international speculators)

Well, it is tough i am afraid.

It is difficult to talk about monetary transmission chanels if you are exposed to global events not related to your country (a flight to quality), the trilemma in whatever combination, or even worse, if you depend on a commoditiy or a group of commodities to "balance" the balance of payments, and adquiring hard currency reserves. Or if you are exposed to short term financiing claims as a country in hard currency, and this is related to an expansion of credt financed by international players (a classic onshore carry trade development). well, to name a few potential problems.

I hope it helps

Carlos

The institution of central banking appeared in highly industrialized and competing capitalist nations, e.g. England, Prussia, USA. Your question is factually about planning agency: How far is it possible to police money ? Monetary systems evolution operates today by the fiat credit money of private banking corporations; central banking should ideally police the emitted quantities. Only point 1 of your agenda applies, in the sense what Peter Bias mentioned above. In any case, I do think that the statement: there were only 3 great inventions=the fire, the wheel and central banking holds some truth.

Central bank can

foster economic growth,

maintain monitory stability,

reduce inflation,

reduce employment,  

control money supply and interest rate

Encourage investment 

Dear Prof. Senzu,

                              If you take a corporate differentiated approach to Central Banking in the sense that Central Banks are to be Systems Integrated (Mallick (2014), Mallick, Hmaburger, Mallick (2016, 2017)) after being Systems Classified in terms of Digital Banking, control systems and hence the effectiveness of day to day policy measures depends on this Physics outcome. We have developed a ratio which we have called p-ratio in Mallick (2010) which is also published in Nature.com abstracts and integrates the Econophysics Quantitative Finance function of Bank Financial Management in terms of Loans and Advances as well as the Systems Approach to satisfy the Quantum Information protocols of systems integrated demand and systems integrated information and in a String Theoretic Systems Integration way (Mallick, Hamburger, Mallick (Dbranes String Functor Algenra Calculus (Mallick, Hamburger,Mallick (2016,2017)) satisfying the requirementa of quantum mechanics thereby having space-time derivatives in cybernetic systems space. We have won the Millenium Prize for our Calculus and now we hope to win the ultimate Nobel Prize in Physics for it. But that should not stop you from using our results for solving your problem. The very fact that this can be done on digital internetworks (we have used the Windows operating system for it although our results are operating system independant being purely Mathematically closed therefore verifiable in RiemannAlgebra(Mallick, Hamburger, Mallick (2016)) by Laplace Transforms say so makimng use of earthly entropy and Laws of Thermodynamics.

Soumitra K. Mallick

for Soumitra K. Mallick, Nick Hamburger, Sandipan Mallick

The argument in submission from the following scholars, Carlos, Stephen, Iqbal and Soumitra, is remarkable as a unit of itself and acknowledges receipt to all.

However, I am beginning to be convinced with observation that in 'developing economy' the behaviour of Central Banks seems to trend in line with the submission of Peter, Kathleen, Carlos and Stephen.

For instance, there was a situation where a renowned lawyer in Ghana has to drag the Central Bank of Ghana to the Supreme Court of the Land to be posting and posturing on its website of achieving the above objectives of causing economic growth and stability, lowering unemployment and maintaining a predictable exchange rate. Especially, the last point was the lawyer's main charge against the Bank of Ghana, with the intention of his charges as exhibiting an act of fraud. Posting onto its public website on the above listed objectives to fulfill, yet  incapable to achieve, causing him as the lawyer losing unexpected funds in his business transactions.

i believe the most important function of the central bank is monetary policy formulation and implementation which essentially drives all the other functional areas.

In the case of monetary dominance (in Leeper’s sense), monetary policy is active and fiscal is passive. The central bank strictly follows only its inflation target, so fiscal policy has no choice but to remain passive (i.e., strict in fiscal terms), otherwise the long-term sustainability of the budget would be upset. Leeper considers this economic policy mix to be a basic case, which provides a stable opportunity for cooperation between the two main branches of economic policy.

The scope of the central bank's influence on the economy depends on the scope of implementation of the monetary policy instruments used. In addition, the scope of the central bank's influence on the economy also depends on whether the central bank is also the issuing bank, i.e. it depends on whether the central bank issues the domestic currency. In addition, the scope of gathering foreign exchange reserves and in precious ores is also important factors. The scope of shaping interest rates is also important, as is the direct influence on commercial banks concerning lending activities conducted by these banks.

Regards,

Dariusz Prokopowicz

https://www.yourarticlelibrary.com/banking/the-role-of-central-bank-in-a-developing-economy-of-a-country/11138