A Central Bank is a financial institution that manages a country's currency, money supply, and interest rates. It plays a crucial role in the economy by implementing monetary policy, which helps control inflation and stabilize the currency. Central banks also oversee commercial banks and provide financial services to the government.
One of the primary functions of a central bank is to act as a lender of last resort, providing liquidity to banks during financial crises. Examples of central banks include the Federal Reserve in the United States, the European Central Bank in the Eurozone, and the Bank of England in the United Kingdom.