What is a central bank?

A central bank is the apex financial institution of a country, responsible for regulating and supervising the banking system while implementing monetary policy to achieve economic stability. It acts as the lender of last resort, ensuring liquidity in the financial system during crises. Key functions include controlling interest rates, managing foreign exchange reserves, issuing currency, and maintaining price stability to curb inflation.

Central banks also promote financial stability, oversee commercial banks, and serve as fiscal agents for the government by managing public debt and treasury operations. In Nepal, the Nepal Rastra Bank (NRB) fulfills these roles to sustain economic growth and financial integrity.