According to a press report, newly appointed State Bank governor Yaseen Anwar plans on working closely with the Senate to sanctify into law the SBP's independence - something it has worked to establish in practice over the past decade.
The news report also pointed out that the State Bank (Amendment) Bill - which would reduce the role of the finance ministry in overseeing the central bank and abolish the government's right to supersede the SBP's decisions - was unanimously passed in the National Assembly on November 4, 2010.
Without any iota of doubt, the principal role of any central bank is its executive right to issue money and responsibility over its value. Moreover, the primary objective of a central bank is to maintain price stability in the country. An autonomous central bank, therefore, can undertake these and similar responsibilities in a more effective and meaningful manner.
There has been a renewed debate in financial circles about the autonomy of SBP or lack thereof. In the past, the central bank had been accused of becoming an enthusiastic partner with the government in misleading the public about macroeconomic trends and creating an allusion of prosperity.
The State Bank had been given, albeit incremental, autonomy to do independent analysis and sift the ordinary factors from the extraordinary and to give an objective assessment of the underlying macroeconomic trends. Unfortunately, however, the central bank did not play its due role as it was later accused of surrendering the authority that was given to it to limit government borrowing and to ensure monetary stability. The appointment of a seasoned banker Yaseen Anwar is nevertheless a triumph for those who want to see that the central bank discharges its assigned responsibilities in relation to the maintenance of overall financial stability in the country with professionalism and efficiency.