RBI Governor Defends Central Bank Independence Amid Fed Probe

Global Autonomy Under Fire

Reserve Bank of India Governor Sanjay Malhotra has underscored the critical importance of central bank independence, speaking out as the U.S. Federal Reserve faces scrutiny over its leadership. The U.S. central bank's autonomy has come under a cloud following confirmation that Chair Jerome Powell is subject to a criminal probe by the Department of Justice. Reports suggest the investigation pertains to alleged irregularities concerning renovation costs at the Federal Reserve's Washington headquarters.

India's Stance on Stability

In an exclusive interview with NDTV Profit, Malhotra articulated a strong defense of the principle, stating, "Central bank independence... is very important." He noted the global trend toward separating monetary authority from governmental influence, a movement he believes must be preserved. While not directly referencing the allegations against Powell, Malhotra issued a call for "collective commitment" across jurisdictions to uphold the ideals of modern central banking. He expressed optimism that this autonomy "should only improve over the years."

The investigation into Powell marks a significant development, reportedly the first time a sitting Federal Reserve Chair has faced the threat of criminal indictment. Such events can send tremors through global markets, making Malhotra's reaffirmation of India's stable, independent monetary framework particularly noteworthy for investors.