New bill to repeal Monetary Law Act gazetted

A draft bill to repeal the Monetary Law Act will give administrative and financial autonomy to the Central Bank. 

Under the bill, which has now been gazetted, the Central Bank’s autonomy shall be respected at all times. No person or entity can cause any influence on the Governor of the Central Bank or other members of the Governing Board and Monetary Policy Board or employees of the Central Bank in the exercise, performance and discharge of their powers, duties and functions under the Act or interfere with the activities of the Central Bank.

The bill stresses that except in the exercise, performance and discharge of the powers, duties and functions under the Act, the Governor of the Central Bank or other members of the Governing Board and Monetary Policy Board, employees of the Central Bank or any person authorized by the Central Bank shall not seek or take instructions from any person. However, this shall not prevent the Central Bank from seeking professional or expert advice to effectively exercise, perform and discharge its powers, duties and functions under this Act or any other written law.

The bill notes that the primary object of the Central Bank shall be to achieve and maintain domestic price stability financial autonomy. The other object of the Central Bank shall be to secure the financial system stability. 

The new Act will pave the way for the establishment of the Governing Board of the Central Bank. It will be charged with the responsibility of overseeing the administration and management of the affairs of the Central Bank and the determination of general policy of the Central Bank other than the monetary policy.

The Central Bank’s Governor shall be the Chairperson of the Governing Board and it will also consist of six members who shall have expertise in economics, banking, finance, accounting and auditing, law or risk management.