what does it mean when i hear ” the central bank puts cash into stock market.” where does it go?

jim s: what does it mean when i hear ” the central bank puts cash into stock market.” where does it go?

Answers and Views:

Answer by Joseph O
It means that they have invested some of their liquid assets into the form of stocks.

Answer by Nick Z
Central banks are giving loans to private banks in their countries.

Private banks need this money to pay panicked investors who are withdrawing their money from funds which have significant investments in mortgage loans.

Answer by joe s
Central banks don’t “put cash” into the stock market.

Central banks put money into the “economy”. Central banks control the flow of cash. They do this by “lending” money to their member banks. The banks then lend the money to businesses.

What the Fed did over the last few days was to inject cash into the economy by repurchasing gov’t bonds (know as repo’s) from the banks so they would have the liquidity to lend. The markets are going crazy because of the lack of capital in the markets.