What Is Central Bank? Meaning & Example
Definition
A central bank manages a country's money supply and sets key interest rates. Its goals often include stable prices and healthy employment.
Related terms
Monetary policy refers to central bank actions, such as setting interest rates and managing the money supply, to influence the economy. Tighter policy cools activity, while looser policy supports it.
Interest RateAn interest rate is the cost of borrowing money or the reward for saving it, shown as a yearly percentage. Central bank rate decisions influence rates throughout the economy.
Quantitative EasingQuantitative easing is when a central bank buys large amounts of bonds or other assets to push down longer-term interest rates and support the economy. It increases the money supply.
What is Central Bank?
A central bank manages a country's money supply and sets key interest rates. Its goals often include stable prices and healthy employment.
Can you give an example of Central Bank?
When inflation runs high, a central bank may raise rates to cool demand.