Remarks
Central Bank Autonomy Faces Challenges in Three Emerging Markets
Government leaders in Brazil, Indonesia, and Turkey lean on supposedly independent monetary policymakers to solve political problems.
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Central bank independence, a totem of economic respectability, is being challenged in some key emerging markets as the Covid-19 pandemic rages toward its second anniversary.
Autonomy in setting interest rates has become almost holy writ the past few decades. Countries whose policymakers can act without political encroachment are widely considered to be better managed, with superior long-term growth and inflation that’s under control. The idea is that central bankers can act in a nation’s long-term interest without deference to government leaders; the latter by instinct tend to shy away from tough decisions.