Why we need an independent central bank

Ideally, politics and central banking should be like oil and water. But we do not live in a perfect world.

The Nepal Rastra Bank, Nepal’s central bank, published its monetary policy for the fiscal year 2021/22 on August 13. Earlier, it was on course for making it public in the third week of July. The delay was due to the change in government. After the Supreme Court on July 12 reinstated the dissolved House of Representatives and ordered Sher Bahadur Deuba to be appointed as new prime minister, KP Sharma Oli resigned on the 13th. Deuba took the oath of office the same day, appointing Janardan Sharma of the Communist Party of Nepal (Maoist Center) as finance minister. A new coalition government and a new finance minister meant a possible change in fiscal policy, which the monetary policy supposedly needed to accommodate.