Shal­iza Has­sanali

Econ­o­mist Dr Dhanayshar Ma­habir has ap­pealed to new­ly-ap­point­ed Gov­er­nor Jwala Ram­bar­ran to in­sti­tute ag­gres­sive reg­u­la­tions at the Cen­tral Bank (CB) as soon as pos­si­ble. Among the mea­sures Ma­habir ad­vised Ram­bar­ran to adopt was a sep­a­ra­tion be­tween the fis­cal and mon­e­tary au­thor­i­ties. "If there is no clear sep­a­ra­tion then the fi­nan­cial health of the coun­try could be in jeop­ardy."

Ma­habir said Ram­bar­ran al­so needs to es­tab­lish ear­ly warn­ing sys­tems for things to work ef­fec­tive­ly. "And these warn­ings would have to be done via ag­gres­sive reg­u­la­tions. That may have been the prob­lem with the past gov­er­nors. Win­ston Dook­er­an had the same prob­lem. He has to work with the leg­is­la­ture and change the Cen­tral Bank Act to have more pow­ers to reg­u­late."

Ma­habir ap­pealed to Ram­bar­ran to en­sure the HCU/Cli­co mat­ter does not ar­rive in our coun­try again. "We can­not af­ford an­oth­er cri­sis like that." While the CB has been fo­cus­ing on com­mer­cial banks, Ma­habir said Ram­bar­ran has to un­der­stand that in­sur­ance com­pa­nies and mort­gage in­sti­tu­tions do con­trol a large amount of re­sources.

Ma­habir rec­om­mend­ed that reg­u­la­tions of in­sur­ance com­pa­nies with a widen­ing and deep­en­ing of the in­sur­ance in­spec­torate be quick­ly im­ple­ment­ed. Ma­habir said Ram­bar­ran must guard the in­de­pen­dence of the CB. "If the Cen­tral Bank is seen as an arm of the Min­istry of Fi­nance you can get to a sit­u­a­tion where it will be­come a tool of the ex­ec­u­tive arms of the State and it can put stress on the cur­ren­cy val­ues."

He called on Ram­bar­ran to en­sure the ex­change rate is sta­ble and keep a keen eye on the Unit Trust Cor­po­ra­tion, en­sur­ing that bil­lions in funds are prop­er­ly man­aged. "The Unit Trust did go out of the am­bit of the law when they in­vest­ed in Cli­co se­cu­ri­ties. They jeop­ar­dise a lot of share­hold­ers' mon­ey in the process."