{"id":198228,"date":"2022-08-01T18:27:18","date_gmt":"2022-08-01T12:57:18","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=198228"},"modified":"2022-08-01T18:27:18","modified_gmt":"2022-08-01T12:57:18","slug":"central-bank-autonomy-and-its-crypto-plot-twist","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/central-bank-autonomy-and-its-crypto-plot-twist\/","title":{"rendered":"Central bank autonomy and its crypto plot twist\u00a0"},"content":{"rendered":"\n

Source:<\/strong> The post is based on an article \u201cCentral bank autonomy and its crypto lot twist\u201d<\/strong> published in the Live Mint on 31st<\/sup> July 2022.<\/p>\n

Syllabus:<\/strong> GS 2 Issues and Challenges pertaining to the growth and development of the Indian Economy<\/p>\n

News:<\/strong> At present, there are arguments that the Central banks should have functional autonomy to target their aim of country\u2019s\u00a0financial stability and development.<\/p>\n

Situations at present \u2013 The loss of autonomy of the central banks in India\u00a0<\/strong><\/h5>\n

Nowadays, the liberty of the central banks is bounded under the legal\u00a0mandate<\/strong>. For example,<\/strong> in 2016, the Reserve Bank of India was given a mandate to keep inflation within in particular range. Therefore, there is a special panel to decide the monetary rate policy, in which the government\u2019s appointees also play important role.<\/p>\n

Further, the RBI-Centre relations went through a rocky patch around the time of demonetization.<\/p>\n

Last year, RBI\u2019s target band was renewed till the end of 2025-26. However, there are elections in 2024 which might impact it.<\/p>\n

What are the arguments for more autonomy to central banks?<\/strong><\/h5>\n

First,<\/strong> we can look at the example of the US. US Federal Reserve has autonomy in decision making. It is not forced to make price stability, its top priority and can take the decisions on the basis of long-term benefit to the economy.<\/p>\n

Second,<\/strong> separation of powers based on expertise is seen to maximize public welfare. It is being followed in many other countries as well.<\/p>\n

Third,<\/strong> at present, most of the economies are\u00a0the crypto disruption. Central banks must make serious policy efforts the strengthen their currencies.<\/p>\n

What are the arguments against more autonomy to the Central bank?<\/strong><\/h5>\n

One,<\/strong> all policies in a democracy must stay accountable to people via elected governments; and<\/p>\n

Second,<\/strong> since monetary<\/strong> and fiscal policies <\/strong>do not work in isolation. They work in tandem, especially in times of crisis. Therefore, the bank\u2019s relations with the government or treasury mustn\u2019t go awry.<\/p>\n","protected":false},"excerpt":{"rendered":"

Source: The post is based on an article \u201cCentral bank autonomy and its crypto lot twist\u201d published in the Live Mint on 31st July 2022. Syllabus: GS 2 Issues and Challenges pertaining to the growth and development of the Indian Economy News: At present, there are arguments that the Central banks should have functional autonomy… Continue reading Central bank autonomy and its crypto plot twist\u00a0<\/span><\/a><\/p>\n","protected":false},"author":10308,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[212,10501],"class_list":["post-198228","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-2","tag-live-mint","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1700232687},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/198228","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10308"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=198228"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/198228\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=198228"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=198228"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=198228"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}