Central Bank Definition

A central bank is a financial institution that is responsible for overseeing the monetary system and policy of a nation or group of nations regulating its money supply and setting interest rates.

Central bank definition. A central bank has no direct interaction with the general public. It has a number of tools by which it uses to control such. A central bank is a semi independent government authority that conducts monetary policy regulates banks and provides financial services.

A central bank is a monetary institution which fully controls the production circulation and the supply of money in the market seeking to regulate the member banks and stabilize a nation s economy and national currency. Central bank is the apex financial institution of the country that administers the operations of the banking system. An increase in a central bank s assets causes a corresponding increase in its deposit liabilities or note issue and these in turn provide the funds that serve as the cash reserves of the commercial banking system reserves that commercial banks by law or custom must maintain generally in.

The bank manages and controls the expansion and contraction of the supply of money in the economy. The central bank controls monetary policy which includes power over inflation exchange rates and the money supply. Central banks traditionally regulate the money supply by expanding and contracting their assets.