Following role do commercial banks play in implementing

monetary policy:-

1. Interest Rate Transmission: In most countries, the commercial banks lend money and accept deposits at rates that are attached to their country’s central bank rate; borrowers and savers have the influence over the amount they are willing to borrow or save within the economy.

2. Credit Availability: With regard to some policies from the central banks, commercial banks regulate credit supply in businesses and consumers by changing their lending policies.

3. Open Market Operations (OMOs): The holders of OMOs are the commercial banks, shareholder deposits commercial banks are in the buying and selling government securities that have repercussions in the liquidity of the banking sector.

4. Reserve Requirements: All the commercial banks together should maintain the balance through reserves which the Central Bank has provided. Thus, any change in these requirements will determine the range to which the banks can provide money.

5. Money Supply Management: Using money obtained from borrowing, deposits they hold and through managing their required reserves, commercial banks help in realization of other monetary policy objectives as needed, say controlling inflation or boosting growth.

6. Economic Stabilization: Relaying the central bank policies or goals, it’s a responsibility of commercial banks to curb consumption, investments amongst other related economic activities.