IMF warns against political pressure on central banks: importance of their independence

The head of the International Monetary Fund (IMF), Kristalina Georgieva, has expressed serious reservations about the risks of political interference in the work of central banks and personnel issues. She expressed this position in her blog on the IMF website.

In modern times, central bank governors are under pressure to cut interest rates, even though this can be dangerous, Georgieva said.

"Independent central bankers have successfully dealt with the consequences of the COVID-19 pandemic by using flexible monetary policy. IMF research shows that central banks with a high level of independence are more effective in fighting inflation," the IMF chief wrote.

She also emphasized that central bank independence is an important factor in price stability, and stable prices are a prerequisite for long-term economic growth.

Georgieva emphasized that independence and good governance mean that central bank governors should have control over their budgets and personnel. "They should not be dismissed for their political beliefs or for fulfilling their legal duties. However, they must be accountable and transparent in their activities," she added.