Economic crisis is a situation 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, a 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 crises 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.
