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).
- “Bank” (银行 yín háng) derives from:
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).