Central Banking System

A central banking system is the institution that manages a country's currency, money supply, and interest rates. It acts as the government's bank, overseeing monetary policy to promote economic stability, control inflation, and support sustainable growth. Central banks regulate commercial banks, provide financial services, and serve as a lender of last resort during financial crises. By adjusting interest rates and managing reserves, central banks influence borrowing and spending in the economy, ultimately aiming to enhance overall economic health and stability. Examples of central banks include the Federal Reserve in the United States and the European Central Bank in the Eurozone.