Economy Forward

  S ince the middle of the last year, the world has been facing historically high inflationary pressures, despite the mandates of central banks with so-called independence to preserve the price stability, among other objectives such as financial system stability, high real income and maximum employment.  Governments in developed countries with greater market-based economies, while worrying about the rising cost of living of the general public, finger at central banks by calling that it is the duty of central banks to control inflation and that the central bank independence to bring the inflation under control is respected. Meanwhile, Governments in developing countries are confronting political instability as the economies are largely state controlled where central bank monetary policies exist largely on state funding. However, as Governments and economists generally treat central banks as independent from the Government fiscal policies and their prime objective of operations as the

  T he six-year term of the CB Governor that commenced on July 1, 2016, is to expire on this June 30. The present Governor has been appointed on April 07 for the balance period due to resignation of the former Governor on April 4. At the BBC interview held on last 17, the present Governor has stated that he would expect to serve in the next full six-year term, and he would not have accepted the present post if he were to leave after two months of service. Meantime, a highly politicized social media campaign prevails forcing the President to appoint him for the new term of six years. They state the reason as the success of the Governor having already stabilized the economy during this difficult time. Some have even threatened to lead another round of social protest campaign if he is not reappointed. Bank depositors who have temporarily benefitted from the extraordinarily high interest rate policy of the Governor are also seen in the forefront of this social media campaign. Therefore, th