KUALA LUMPUR: Former Umno leaders Khairy Jamaluddin and Shahril Hamdan believe it is time for the Bank Negara Malaysia (BNM) to be institutionalised for a better accountability involving the country's monetary policy decisions.
During the 'Keluar Sekejap' online podcast on YouTube, Shahril said central banks in foreign countries would face committees in the parliament to defend its decisions.
"It is the right of BNM and within its powers to make decisions but the Prime Ministers and the Finance Ministers are facing the political backlash.
"The governor of the banks (abroad) are questioned and criticised by the elected representatives. This is something that we can think about (to be implemented).
"I wonder if in Malaysia, there is room to retain BNM's independence but improve the governance and accountability to more than what it currently is right now," he said in the podcast released today which commented on the latest hike in the overnight policy rate (OPR) by BNM.
Agreeing to the suggestion, Khairy said BNM can present its decision to the special finance committee in parliament where questions can be directed to its governor.
He said that BNM has always been seen as a faceless bureaucracy and though the decisions, for instance on OPR, were not the government's, he said it would not be wrong for the ministers to explain it.
"On matters that they (BNM and government) agree on, they can say that they agreed because it is reasonable.
"If they do not, then they can tell the people that this is the executive separation of powers between Bank Negara and the government.
"The problem is that we are neither here nor there.
"Whenever there is a decision to increase the OPR, no one in the government would want to touch on it, as if it has become a poisoned chalice. This is not ok," he said.
Last week, BNM decided to increase the OPR by 25 basis points to three per cent.
The ceiling and floor rates of the corridor of the OPR were correspondingly increased to 3.25 per cent and 2.75 per cent respectively.
BNM said with the domestic growth prospects remaining resilient, its Monetary Policy Committee (MPC) had judged that it was timely to further normalise the degree of monetary accommodation.