The supervisory functions of the Bank have also changed considerably, shifting from the task of ensuring commercial banks’ compliance with credit and exchange controls and regulations, to the monitoring and the evaluation of bank asset quality, and the solvency and capital adequacy of these financial institutions.
During the late 1980s and the 1990s, a substantial shift occurred in thinking about the role of the central bank in the economy. Experience of past episodes of hyperinflation in various countries, as well as of moderate inflation, exemplified in the breakdown of the Bretton Woods system, led to the finding that monetary policy is not necessarily independent of the government of the day.