Farzana Sharmin
Reserve of Central Bank of any country is a very important financial element in the world. It keeps a great role in the development of any country. The countries which have little amount of reserve in central bank those countries are facing a great financial trouble.
Generally, when Government of any country tries to control the money supply of banks through monetary policy for reducing inflation cost of the import and loan requirement of businessmen and general people try to control on the reserve of that country. Beside that when Government of any country takes excess loans from the banks to implement mega projects or meet the costs of the unproductive sector the reserve and the amount of dollar of central bank and other banks shrinks down. The central Bank of any country imposes a new interest rate of loan for controlling money supply of any country. The high rate of interest in bank loan decreases the investment of private or non-Governmental sector as like decreases the total amount of reserve in the central bank.
If the reserve of the Central bank of any country is shrunk down day by day that country could have been suffering a great economical problem. The cost of import will be increased day by day. Traders or Investors will be failed to import necessary things for their manufacturing products. Lack of necessary raw materials many industries will be closed forever. Many people will be losing their jobs. It will be quite impossible to supply the products according to the demand of each product. The production of every manufacturing thing will be closed forever. On the other hand, some dishonest businessmen will be stocking a lot of necessary products as if they can increase the price at a later time so that more profit can be done .General people will be faced price hike problem. Even they will be faced food shortage problem.
Many people will be died unexpectedly in the grip of famine epidemics.
To be continued
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