A central bank (中央银行 zhōng yāng yín háng), sometimes, in short, “央行” (yāng háng), refers to a national financial institution which has the authority to control the money supply, regulate the interest rates, establish monetary and fiscal policies, and regulate member banks. It is very important to a country's economy and helps the country to achieve economic goals such as a stable price level and low unemployment.
Part 1: Breakdown of Words
"Central" (中央 zhōng yāng) as in "central government" (中央政府 zhōng yāng zhèng fǔ), or "central air conditioning" (中央空调 zhōng yāng kōng tiáo).
“中” (zhōng) as in "China" (中国 zhōng guó), "intermediate" (中级 zhōng jí), "middle" (中间 zhōng jiān), or "Central Europe" (中欧 zhōng ōu).
“央” (yāng) as in "beg" (央求 yāng qiú), or "CCTV (China Central Television)" (央视 yāng shì).
"Bank" (银行 yín háng) derives from:
“银” (yín) as in "silver" (白银 bái yín), "silver-colored" (银色 yín sè), or "silver screen" (银屏 yín píng).
“行” (háng) as in "industry" (行业 háng yè), or "rank" (行列 háng liè).
Part 2: Examples:
European Central Bank (欧洲中央银行 ōu zhōu zhōng yāng yín háng).
Central bank reserves (中央银行准备金 zhōng yāng yín háng zhǔn bèi jīn).
Central bank balance sheet (中央银行资产负债表 zhōng yāng yín háng zī chǎn fù zhài biǎo).