Fitch warns of increasing threats to the independence of central banks

[yota691]

Fitch warns of increasing threats to the independence of central banks

 

 08 Apr 2019 02:33 PM

The recent challenges to the independence of central banks in a number of countries are just the beginning of a long and protracted debate on macroeconomic policy that is likely to continue for years especially as economic growth slows.

In a report issued by the credit rating agency on Monday, it pointed to a number of factors that threaten the independence of central banks, which is slowing growth in most major economies and not significantly reduce the debt levels of a number of governments during periods of strong growth.

He added that the financial space was once again limited and that central banks, which had helped lift emerging markets emerging from crisis over the past two decades, were increasingly seen as ripe to extend their validity beyond inflation control.

The report stressed that it is prudent for investors to consider the potential effects of growing political pressure aimed at further monetary policy contribution to support growth by non-economic means.

The debate on the modern monetary theory shows the increasing pressure on central banks.

"Although modern theory is intolerable to be adopted anytime soon as a policy but at the same time indicates that the call of central banks to do more effort will continue to grow."