Bangladesh Bank Independence and Governance: Lessons from Reserve Bank of Australia

Abstract: 

The paper examines the independence and governance of Bangladesh Bank in time of setting monetary policy, introducing & using monetary instruments, making deficit financing to the government, and performing any other functional activities that prescribe by law. For a sustainable growth and macroeconomic stability proper independence and governance of central bank is equally important like other factors. This study is based on CBIG model that is used to measure the degree of central bank independence and governance. In this work it is found that Bangladesh Bank (BB) as the central bank of Bangladesh has a very little independence and there is great deal of influence of the government over its activities. After recognizing several aspects of Bangladesh Bank (BB) independence and governance it is observed that BB’s overall CBIG index is quite low compare to the Reserve Bank of Australia (RBA). More specifically, BB has the opportunity to enhance its overall CBIG index by improving the independence in legal, price stability objective, exchange rate policy, monetary policy & deficit financing and accountability & transparency aspect.

Subject and Keywords: 
Year: 
Volume: 
XXXV
Issue: 
3
Page: 
209-238
Article Identifier: 
569