Editorial | Why the government must be stopped from chaining the central bank governor
Summary
The amended Nepal Rastra Bank Bill would let the government influence the central bank governor’s tenure, raising concerns over the institution’s independence. The editorial argues that the governor needs a secure fixed term and that political control over appointments and directives should be removed.
Key Points
- The amended Nepal Rastra Bank Bill would allow the government to extend the governor’s term based on performance and retain directive power over the central bank.
- The editorial warns that this would undermine the independence needed for monetary policy, banking supervision, and inflation control.
- It cites past cases involving Tilak Rawal and Maha Prasad Adhikari as examples of political pressure on governors.
- The piece urges Parliament to strengthen Nepal Rastra Bank’s autonomy and prevent conflicts of interest in governor appointments.
