The Central Bank is an independent organization obligated by the state government to manage the main financial functions, such as issuing the state's currency, maintaining its monetary value, contributing to the regulation of the quantity of money supply, and following up on all operations of commercial banks.

The central bank is known as the national bank of countries, and contributes to providing a range of banking and financial services to the government of the country to which it belongs, and is interested in following up the system of commercial banks, and implementing the government’s financial and monetary policies. Among other definitions of the central bank is a bank that is interested in developing financial plans for the government of the country, and contributes to their implementation , and controls funds within the economic sector.

The emergence of the Central Bank is an advanced stage of the stages that contributed to the development of commercial banks in the nineteenth century AD. The Swedish Central Bank is the oldest central bank in the world; It was established in 1656 AD, and became a central bank of Sweden in 1668 AD, but the Central Bank of England, which was established in 1694 AD, is the first in the world, through its application of all the functions of the central bank, and its keenness to develop the principles of the art of banking exchange.

Since that time, this type of bank has spread, specifically in the continent of Europe. Central banks have appeared in Austria, the Netherlands, Finland, France, and other countries. The Arab world has witnessed the emergence of many central banks in Egypt, Algeria, Tunisia, and Lebanon. And other Arab countries, and central banks continued to witness a spread in the twentieth century AD, especially after the recommendation of the Brussels Conference in 1920 AD that central banks should be established in all countries, with the aim of maintaining the strengthening of international cooperation in the field of money, and supporting the stability of the banking process.

Prior to the twentieth century AD, the operations of central banks did not have a specific monetary system, as their role was limited to the issuance of securities for their affiliated countries, but with the passage of time the central bank acquired many tasks, functions, and duties that contributed to giving it the status of public, and also the events affected The economic policies associated with financial crises depend on the development of the Central Bank, as dealing with monetary policy has become dependent on it being part of the economic policy tools in general.

The Central Bank has also become responsible for implementing this policy; Which contributed to its acquisition of the credit control function, the Central Bank is characterized by a set of characteristics, namely:
- The central bank is a monetary institution that belongs to a public property, as the governments of countries take over the management and supervision of the central bank by establishing a set of laws that define its duties and objectives.

- The Central Bank is at the forefront of the banking system, because it has supervisory authority over commercial banks.
- The Central Bank is not interested in making profits, but rather its existence depends on achieving the general interests of the state.
- The central bank is characterized by its ability to convert assets of a real or fixed nature, such as real estate, into cash assets.
- The central bank is the financial institution that monopolizes the process of issuing money.

- The Central Bank has a strong relationship with commercial banks, and has different methods and authority to influence the activities and activities of these banks, which contributes to achieving the country's economic policy.
- The Central Bank is an independent institution in managing monetary policy, and the executive authority does not interfere with the nature of its work.

The presence of the central bank in countries depends on the implementation of a number of basic functions, including:
- Issuance of coins:
It is the main and basic function of the Central Bank, because it is the only authority that has the authority to issue banknotes, depending on obtaining the approval of the specialized government, and the Central Bank fully controls the total amount of currency in circulation.

- Government Bank: It is the function of the central bank as a bank of the government, and it is linked with its official nature that distinguishes it from the rest of the banks, as the government is keen to deposit its money in the central bank, because of its huge amount that is commensurate with the role of the central bank in maintaining government funds, and also contributes to providing Other services for the government, such as monetary and financial advice, and stock monitoring to set the state's general financial policy.

- Bank of banks: It is the function associated with banking custom, which refers to the need for commercial banks to keep part of their financial reserves as deposits in the central bank, which contributes to strengthening the function of the central bank by imposing its control over credit in banks, and settling debts that are exchanged between commercial banks.
- Practicing normal banking business: It is one of the functions applied by the Central Bank and does not include dealing with individuals and establishments. However, most central banks maintain certain limits to deal with normal banking operations, due to the presence of a group of important influences, such as the nature of the money market, and the insufficient number of banks. existing in the local market, to implement all banking services within the banking sector.

The independence of the Central Bank is one of the most important means that guarantees the protection of the banking and financial sector from political influences. The independence of the Central Bank is defined as providing isolation of monetary policy from any continuous political pressures, and it is represented in setting rules for monetary policy that limit the freedom of the Central Bank, and the Central Bank achieves independence within the parties the following:

- Supervisory independence: it is the implementation of rules, crisis management, and protection for the supervisors in the Central Bank while they carry out their responsibilities.
- Institutional independence: is to prepare clear arrangements for the appointment and dismissal of senior employees, defining the management and organizational structure, the responsibilities and roles of members of the board of directors, and applying transparency during decision-making in the Central Bank.
- Budget independence: It is the freedom of the Central Bank to appoint, train employees, and pay bonuses to them.