MONETARY INTEGRATION ADDRESS
How price stability ensures central bank independence
‘Only governments can put the economy on a higher growth path,’ says Bundesbank executive
A narrow mandate of price stability for central banks is the only way to ensure that they have unquestioned independence, one of Germany’s leading monetary policy makers said on Monday. Andreas Dombret, who is a member of the executive board of the Deutsche Bundesbank, was speaking in Pretoria just a day before the high court threw out the public protector’s recommendation to change the Reserve Bank’s price stability mandate. He declined to comment on events in SA or on its central bank. However, he said in an address at the University of Pretoria: "Independence and a narrow mandate for central banks are important achievements. "The thought that these achievements might be questioned deeply unsettles me." Dombret said that in a democracy, politicians would concede control over monetary policy to a central bank only if the focus of the bank was on a narrow mandate, to maintain stable prices. Otherwise, the central bank would have too large a span of control, he said. "Using monetary ...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.