Can central banks survive the Age of Populism?

Is central bank independence the next casualty of the age of populism? In the US, President Donald Trump has declared that the Federal Reserve is "going loco".

He blames Fed chairman Jerome Powell for threatening "his" recovery and for market volatility caused in part by uncertainty over the trade war Mr Trump himself started. In India, reports emerged last week that the government might invoke a never-before-used section of the law governing the Reserve Bank of India (RBI) to force it to reverse course on some recent controversial policies. The government wants the central bank to loosen lending restrictions - to fuel economic activity and jobs growth - and turn over more of its cash reserves, presumably to fund populist spending ahead of next year's elections.

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A version of this article appeared in the print edition of The Straits Times on November 05, 2018, with the headline 'Can central banks survive the Age of Populism?'. Print Edition | Subscribe