Analyst Highlights Risks to Economic Stability if Central Bank Independence is Compromised
Thank you for reading this post, don't forget to subscribe!Business analyst Chika Mbonu has underscored the crucial role of Central Bank independence in maintaining a healthy economy.
In an interview with ARISE NEWS on Thursday, Mbonu elaborated on the clear distinction between fiscal policy, managed by the government, and monetary policy, administered by an independent central bank.
Mbonu explained, “Every economy is driven by two key policies. Fiscal policy is set by the government in power, while monetary policy is anchored by an independent central bank.
This central bank manages the money supply, which directly impacts inflation, interest rates, and exchange rates.”
He emphasized that the independence of the central bank is vital for effectively executing these policies and promoting economic growth.
“The Central Bank of Nigeria must be free from political influence to function properly,” Mbonu stated.
His comments come amid ongoing discussions about a proposed amendment to the CBN Act by Nigerian lawmakers.
Mbonu expressed strong disapproval of the amendment, arguing that it could undermine the bank’s autonomy and hinder its ability to manage the economy effectively. “For the betterment of the country, the law seeking to amend the CBN Act should be abolished,” Mbonu concluded.
