A country's central bank, often referred to simply as the central bank, is a key financial institution responsible for managing the country's money supply, controlling its monetary policy, and often overseeing the banking and financial system within the country. Central banks play a vital role in the overall economic stability and financial well-being of a nation. Here are some of the primary functions and responsibilities of a central bank:

Monetary Policy: Central banks are responsible for formulating and implementing monetary policy. This involves regulating the money supply to achieve specific economic goals, such as controlling inflation, promoting economic growth, and maintaining price stability.

Currency Issuance: Central banks have the exclusive authority to issue a country's currency, including banknotes and coins. They ensure the quality, security, and availability of currency in circulation.

Banker to the Government: Central banks often act as the government's bank, managing its accounts, processing transactions, and facilitating the borrowing and lending of funds on behalf of the government.

Banker to Commercial Banks: Central banks serve as the "lender of last resort" for commercial banks, providing them with liquidity and stability in times of financial crises. They also supervise and regulate commercial banks to ensure the stability of the financial system.

Foreign Exchange Management: Central banks manage a country's foreign exchange reserves and often engage in foreign exchange market interventions to influence the exchange rate of the national currency.

Financial Stability: Central banks monitor and promote the stability of the financial system, including overseeing payment systems, conducting stress tests on banks, and implementing regulations to prevent financial crises.

Economic Research: Central banks conduct economic research and analysis to better understand the economic environment and make informed policy decisions.

Price Stability: Maintaining price stability is a primary objective of many central banks. They aim to control inflation within a target range to ensure the purchasing power of the currency remains relatively stable.

Regulatory and Supervisory Functions: Central banks often have regulatory and supervisory authority over banks and other financial institutions to ensure they operate in a safe and sound manner.

The specific roles and responsibilities of a central bank can vary from one country to another, depending on the country's legal framework, economic goals, and historical context. Examples of well-known central banks include the Federal Reserve in the United States, the European Central Bank (ECB) in the Eurozone, the Bank of England in the United Kingdom, and the Bank of Japan in Japan. In Malaysia, Bank Negara Malaysia is the country's central bank and is located in Kuala Lumpur , the country's capital city. These institutions play a critical role in the overall functioning of their respective economies.