Government vs RBI : IMF Warns Against Taking Any Move That Thwarts The Independence Of Central Banks

In what can be seen as veiled dig at the government of Prime Minister Narendra Modi, the International Monetary Fund has said it was monitoring the development in India with regard to the reported rift between the Reserve Bank of India and the Centre.

It expressed its opposition to any move that compromises with the independence of central banks anywhere in the world.

“We’re monitoring the development on that issue and will continue to do so,” IMF Director of Communications Gerry Rice told reporters on Thursday when asked about the row.

“Just stepping back, as a general principal, and we’ve said this before. I’ve said this before standing here that we support clear lines of responsibility and accountability…

“And, international best practice is that there should be no government or industry interference that compromises the independence of the central bank and financial supervisor,” Rice said.

This is true across the range of countries that the independence of the central bank and the financial supervisor is of utmost importance, he asserted.

“We regard it as such and we have to make that statement in the context of a number of countries. So, I think that’s probably the best response I can give you,” Rice said, responding to a question on the increasing efforts globally to criticise central banks, including the one by the US President Donald Trump in recent weeks.