What is the purpose of a central bank?
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The purpose of a central bank is to manage a country’s monetary policy, control inflation, stabilize the currency, and oversee the banking system. Examples include the Federal Reserve in the U.S. and the European Central Bank
The main purpose of many central banks is price stability. In some countries, central banks are also required by law to act in support of full employment. One of the main tools of any central bank is setting interest rates – the “cost of money” – as part of its monetary policy. A central bank is not a commercial bank.