Central banks and confrontation of the Covid-19 crisis: procedures and challenges

Summary

Monetary policies play a vital role in supporting economic activity and preserving economic stability by maintaining price stability, facing inflation, and building confidence in economy, which supports investment and achieves high growth rates. In this regard, the great role played by central banks in the wake of the outbreak of the Coronavirus Pandemic has been extremely evident.

However, many debates have been raised about the credibility of central banks and their monetary policies, after relying on them as a major liquidity source has become common in the aftermath of the Covid-19 Pandemic, as they may intervene when markets are exposed to any risks. After successive interventions of central banks in previous economic crises, and then the intensive interventions after the Covid-19 crisis, investors have become accustomed to occurrence of these interventions based on and trusting the roles played by central banks.

This study aims to explore the future of central banks in the wake of the Covid-19 Pandemic, in addition to seeking achievement of a set of sub-objectives, including:

1- Learning about the most important procedures taken by central banks to face the repercussions of the Coronavirus.

2- Reviewing the challenges facing central banks.

3- Exploring the future of central banks after the Covid-19 crisis.