Central Bank Independence and Monetary Policy Effectiveness in the Middle East, Central Asia and Caucasus

ByDmitry Gershenson, Omer Faruk Akbal, Mohamed Belkhir, Rhea Gupta, Koba Gvenetadze, Ashraf Khan, Fei Liu, Antonio Manzanera, Nasir H Rao, Umang Rawat, Xiaoqiao Shen, Subir Lall

June 2, 2026

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Disclaimer: The views expressed herein are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

The subject of central bank independence (CBI) remains a keenly debated topic even decades into its adoption in a growing number of countries. CBI has recently come under renewed scrutiny, including in the Middle East and Central Asia (ME&CA) countries, as pressures for monetary policy to accommodate fiscal needs have intensified. To better inform the debate around CBI, this paper provides the first comprehensive analysis of its role in managing inflation including when subject to shocks, a key indicator on the effectiveness of monetary policies, in ME&CA countries using a novel data set and country deep dives. It further identifies institutional strengths and weaknesses of CBI in ME&CA countries and offers tailored policy recommendations to strengthen CBI.

Subject: Central bank autonomy, Central bank legislation, Central bank organization, Central banks, Inflation, Monetary policy, Monetary policy frameworks, Price stabilization, Prices

Keywords: Asia and Pacific, cbi momentum, cbi reference, cbi reform, cbi Subindices, Central Asia, Central Asia and Caucasus, Central bank autonomy, central bank independence, Central bank legislation, Central bank organization, IMF team, IMF tool, inflation, inflation outcome, macroeconomic resilience, Middle East, Middle East and Central Asia, monetary policy, Monetary policy frameworks, North Africa, Price stabilization

Pages:
58
Volume:
2026
DOI:
https://doi.org/10.5089/9798229041515.087
Issue:
009
Series:
Departmental Paper No 2026/009
Stock No:
CBIMPEA
ISBN:
9798229041515
ISSN:
2616-5333

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