Political encroachment and interference in central bank management are becoming increasingly common in both developed and developing economies. These take varied forms that may include overt political appointments, erosion of statutory powers, or the suppression of sound economic judgment on account of government ownership of the central bank, all merging into the primacy of the political variable in policymaking. In an effort to appease his base, US President Donald Trump is applying unrelenting pressure on Federal Reserve chair Jerome Powell to change the unfolding tightening monetary policy, notwithstanding economic analysis that indicates maintaining low interest rates will result in higher consumer prices. In India, central bank governor and Yale University-educated economist Urjit Patel resigned after Prime Minister Narendra Modi demanded that the Reserve Bank of India transfer its $5.7bn surplus to the national fiscus for the financing of the primary deficit in the run-up to ...

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