Economic crisis is a salutation in which the economy of a country 
experiences a sudden downturn brought on by a financial crisis. An 
economy facing an economic crisis will most likely experience a falling GDP, 
drying up of liquidity and rising/falling prices due to inflation/deflation. 
An economic crisis can take the form of a recession or a depression. 

Economic crisis not only affect the level of economic activities 
but can also cause financial panic, which lowers monetary policy efficiency 
with more damaging effects on the economy. A central bank’s main objective 
during a crisis is to contain the damage and limit the impact of the crisis
on the real economy. This can be achieved through various means such as 
enhancing confidence and calming the market, ensuring uninterrupted flow of credit,
reducing uncertainty, ensuring that markets for short term credit function properly, among others.
Additionally, central banks also have an important role in reducing the probability of a crisis
occurring by undertaking pre-emptive measures that among other things reduce systemic risks.
The role played by central bank as a key regulator of the financial sector is, therefore, critical.

