A central bank is a government institution that oversees a country's monetary system, sets interest rates, manages the money supply, and serves as the lender of last resort to commercial banks. Examples include the Federal Reserve (US), European Central Bank (EU), and Bank of England.
Central banks have several key responsibilities: controlling inflation through monetary policy, maintaining financial stability, regulating commercial banks, managing foreign exchange reserves, and issuing currency.
For example, Bangladesh Bank is the central bank of Bangladesh, responsible for maintaining price stability and supporting economic growth. Central bank decisions — particularly on interest rates — have significant impacts on stock markets, bond prices, and the overall investment environment.