President of the European Central Bank, Christine Lagarde, has warned against political interference in central banks, saying monetary institutions must remain independent to effectively fight inflation and economic instability.
Speaking at a conference in Cambodia on Thursday, Lagarde said central banks across the world were facing growing pressure from politicians and economic crises.
“The question is no longer how to guarantee independence, but how to protect it when it is tested,” she said.
Her comments come amid mounting criticism of the US Federal Reserve by President Donald Trump over interest rate decisions.
Lagarde said history had shown that countries with weak and politically controlled central banks often suffered higher inflation and economic hardship.
She stressed that central banks must be close enough to governments to serve the public interest, but strong enough to resist political pressure.
The ECB boss also warned that rising public debt and economic shocks could weaken the credibility and authority of central banks globally.
According to her, maintaining public trust is crucial, especially during difficult economic periods when tough monetary decisions must be taken.
