Central Bank of Bosnia and Herzegovina Governor urges stronger safeguards for central bank independence amid fiscal risks

The Governor of the Central Bank of Bosnia and Herzegovina, Jasmina Selimovic, spoke at a Brussels conference of central bank governors from the Belgian-Dutch constituency of the International Monetary Fund on global financial trends, fiscal risks and how monetary policy should respond under persistent political and economic uncertainty, with a focus on protecting central bank independence. She argued that central bank independence underpins macroeconomic stability and is a prerequisite for price and financial stability, requiring protection of institutional, operational and financial autonomy from short-term political and fiscal pressures. The remarks highlighted that political uncertainty and rising budgetary needs can push even moderately indebted countries into higher-risk territory, and that unpredictable fiscal policy can undermine market confidence by calling monetary independence into question. Selimovic also noted that a weaker US dollar can support capital inflows to developing countries but may amplify risks through excessive borrowing, greater currency mismatch and vulnerability to abrupt shifts in global financial conditions; proposed safeguards included greater transparency using the IMF Central Bank Transparency Code, stress testing central bank balance sheet positions and improving operational efficiency, alongside fiscal discipline and more transparent public borrowing.