The central banks control credit in the economy through the use of

Central banks control credit in the economy primarily through the use of open market operations. Open market operations involve buying or selling government securities, such as bonds, in the open market. When the central bank buys these securities, it increases the amount of money in circulation, which can make it easier for banks to lend and for businesses and consumers to borrow. Conversely, when the central bank sells these securities, it decreases the amount of money in circulation, which can make it harder to borrow and may reduce inflation. Legal tender, travelers' checks, and foreign exchange instruments are not typically used by central banks to control credit in the economy.