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What does the Central Bank mean?

Learn Forex.  The central body of any country that influences the rate of economic growth and conducts monetary policies to ensure the financial system’s stability is known as the central bank. As investment and commercial banks are competitive bodies and are market-based but these are quite different from them.

Most of the central banks are associated with inflation. What is inflation? It is the changes in the prices of products and services accordingly. They control the interest rates and inflation. For example, a central bank will raise interest rates when inflation increases its range just to limit growth. On the contrary, when inflation decreases beyond the bank’s target amount, automatically interest rates lower.

Most central banks hold regulatory or supervisory powers and answers to the general population and the federal government. This article reveals the mandates and the structures of the world’s most influential central banks.

Key takeaways

i. Central banks manage monetary and economic policy for the state and ensure the stability of the financial system.
ii. These authorities define the interest rates and maintain the economic supply of a state.
iii. The topmost central bank in the world is US Federal Reserve.
iv. The European Central Bank functions to inspect the Eurozone’s policies.
v. The list of other important central banks is as follows;
• The Bank of Canada
• The Bank of England
• The Bank of Japan
• Reserve banks of New Zealand and Australia

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