A Central Bank is an independent government institution that acts as the manager of a country’s monetary policy, conducting activities such as setting the official interest rate, controlling the issuance of currency, maintaining the stability of the financial system and regulating the banking sector. Central Banks have a significant influence on the overall macroeconomic situation and the daily lives of citizens due to the monetary tools they have at their disposal. Central Banks are typically set up in order to promote price stability, employment and economic growth, although the goals and policies of individual central banks may vary.

See also: federal reserve, financial system, economic system, economic growth