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Subang MP Wong Chen said the independence of the central bank must be maintained, to safeguard the interests of the people, economy and investors from the populist pressure exerted by politicians.
He said central bank officials could be called up by the parliamentary special select committee on finance and the economy to explain its decisions, such as the recent rise in the overnight policy rate, which had caused fears that commercial loan interest rates would also go up.
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Wong told FMT: “We have to be careful not to be too populist or to give too much input from politicians because politicians look at short-term gains whereas Bank Negara’s officials have a mid-to long-term position on the OPR.”
He and former MP Ong Kian Ming both agreed that central bank officials should face questioning by MPs, and to explain matters under its jurisdiction.
In April, the Dewan Rakyat set up a parliamentary special select committee on finance and the economy, chaired by Paya Besar MP Shahar Abdullah. It is one of 10 set up by the Dewan Rakyat. Among its members are Petaling Jaya MP Lee Chean Chung, Tuaran MP Wilfred Madius Tangau and Putrajaya MP Radzi Jidin.
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Ong said regular meetings between the central bank and the parliamentary committee would improve communication and understanding.
He further suggested that Bank Negara should publish the minutes of its decision-making monetary policy committee, which meets six times a year to set the interest rate.
Publishing the minutes online would add more transparency and openness to the central bank’s workings, he said.
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The need for Bank Negara to be accountable to Parliament was raised in a podcast by former Umno information chief Shahril Hamdan after the overnight policy rate was raised to 3% on May 3.
He said central banks of some other countries were also required to explain their decisions to their parliaments.
Former Treasury deputy secretary-general Ramon Navaratnam also welcomed Shahril’s suggestion, stating that “nothing is to be made secret unless it is a matter of security”.
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Wong said: “Every time the MPC raises or reduces interest rates and it becomes an important political question, the parliamentary committee can summon Bank Negara officers to explain, thus indirectly explaining itself to Parliament.”
However, he added: “I just hope that we do not inject unnecessary populism into this area, and we let BNM continue doing its good work. But make sure that they are accountable to a parliamentary committee.”
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