The Role of Central Banks
A 1-minute lesson from the MarketPro academy, one of 24 in fundamental analysis.
Central banks are institutions responsible for managing a country's money supply and interest rates, and their decisions are among the most influential drivers of currency and broader market moves. Most central banks operate with a mandate that includes controlling inflation and, in many cases, supporting employment or overall economic stability.
Central banks are institutions responsible for managing a country's money supply and interest rates, and their decisions are among the most influential drivers of currency and broader market moves.
Most central banks operate with a mandate that includes controlling inflation and, in many cases, supporting employment or overall economic stability. Their main lever for doing this is the benchmark interest rate: raising rates tends to cool borrowing and spending to fight inflation, while cutting rates tends to encourage borrowing and spending to stimulate a slowing economy.
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