The Crucial Independence of Central Banks Amidst Political Pressures

The head of Germany's Bundesbank has issued a stark warning against political interference in central banks. The remarks come after U.S. President Donald Trump reiterated his disapproval of Federal Reserve Chair Jerome Powell's decisions on interest rates.

Bundesbank President Joachim Nagel emphasized the essential nature of central bank independence during an interview at a G20 meeting in Durban, South Africa. He described central bank independence as their 'DNA' and cautioned against undermining it, especially in light of recent market volatility triggered by Trump's comments.

While Trump denied reports about firing Powell, he admitted discussing the possibility with lawmakers. Nagel expressed hopes for the U.S. to recognize the fundamental role independent monetary policy plays in ensuring economic stability, and he suggested Europe might offer a more stable investment climate.

(With inputs from agencies.)