European Central Bank
The European Central Bank (ECB) is the official central bank for all countries that use the euro as their domestic fiat currency.
The role of all central banks is to preserve the value of money by keeping inflation low and stable. They do this by controlling the interest rate at which banks can borrow.
Interest rates, inflation, and exchange rates are all intrinsically linked. When the ECB manipulates interest rates this impacts both the inflation in the Euro-zone and also the relative value of the euro compared to other currencies.
Read our guide to the Relationship between Interest Rates and Currencies.
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