A central bank is a financial institution that manages a country's currency, money supply, and interest rates. It plays a crucial role in maintaining economic stability by implementing monetary policy, which influences inflation and employment levels. Central banks also oversee the banking system and act as a lender of last resort during financial crises. In addition to regulating the economy, central banks often issue national currency and manage foreign exchange reserves. They work independently from the government to ensure that monetary policy decisions are made based on economic data rather than political pressures. Examples of central banks include the Federal Reserve in the United States and the European Central Bank in the Eurozone.