By Lucy Craymer
WELLINGTON (Reuters) -New Zealand central bank Governor Christian Hawkesby said on Wednesday that people did not need to look far to see central bank independence under attack around the globe and that the independence of these banks to set policy remains crucial.
Hawkesby said in a speech at a central bank workshop in Auckland that 10 years ago it would have been unheard of for a U.S. president to openly disagree with an interest rate policy decision or call the Federal Reserve chairman a string of names but it has become commonplace.
“The worry amongst the global central banking community is that this rubs off and becomes normalised internationally,” Hawkesby said.
He said that monetary policy is most effective when there are clear, transparent, measurable targets, and a high degree of credibility in the targets and that the government had a role to play in setting those targets.
But once the government has set policy objectives “it is crucial that the Reserve Bank has, and is perceived to have, full operational independence to pursue these objectives,” Hawkesby said.
(Reporting by Lucy Craymer; Editing by Christopher Cushing and Christian Schmollinger)
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