8 - 14February 2001

Central Bank defends its autonomy

by a staff reporter

The Central Bank has defended its autonomy after a number of allegations were made in Parliament and in the media which cast doubts on its professional integrity and autonomy.
In a statement earlier this week, the bank said that it had to put the record straight after the Leader of the Opposition, in December, was reported to have said that the Central Bank was contravening the IMF’s regulations governing the General Data Dissemination System (GDDS) when the bank provided an advance copy of its publications, particularly the quarterly review, to the minister of finance.
This allegation had been echoed by others since then. The Central Bank explained that this allegation was unfounded because long before the Quarterly Review is submitted for printing – which is when the minister receives a copy – the relevant monetary and financial aggregates have already been released to the public and placed on the bank’s website. This means that the GDDS terms and conditions are satisfied.
The bank’s position, the Central Bank said, has now been endorsed in a letter received from the IMF. The letter states that “the key point is that the aggregate data reported in the quarterly bulletins are already available in the regular monthly statistical releases which are issued directly by the Central Bank to all data users, including other official data users, simultaneously. Though the bulletin provides new information on the desegregation of those data, this does not affect the assessment of adherence to the GDDS.” As far as the IMF is concerned, therefore, the bank’s practice conforms with the GDDS.
Another allegation made recently, also by the Leader of the Opposition, is that the Central Bank is under “firm political control”.
Statements about the bank’s supposed lack of autonomy have also been made by the Opposition spokesman on finance and others, and have been largely based on the fact that in the bank’s quarterly review for December 2000 the results of the business perceptions survey were allocated fewer pages than in the past.
While categorically denying that the government in any way intervenes or tries to influence the contents of its publications, the bank said it would like to clarify the situation. “The decision to commission a business perceptions survey was taken a few years ago to complement the available eco-nomic and financial data with an insight into the state of the economy as viewed by the business sector. As might be expected, the length and format of the report on the survey have varied over the years. The latest change was introduced in the December 2000 issue of the quarterly review.
“As the survey report directly concerns developments in the domestic economy, the bank decided to incorporate it as a boxed item in the section of the review that analyses domestic economic developments, rather than as a section on its own. While being presented in a more visually effective manner, the report on the survey results follows the same sequence of previous reports.
“In particular, it continues to comment on the views submitted by operators in the different economic sectors. Thus, while the report is presented in a more succinct form, nothing of substance has been left out,” the Central Bank said.
In conclusion, the bank re-affirmed that as an autonomous institution responsible for monetary policy it has a duty, through its publications, to make known its views on domestic economic and financial conditions. The bank, however, also has the authority and the responsibility to decide, without any outside interference, the format and content of these publications.