As such, the divergence in horizon of decision-making between government and the central bank that I have highlighted need not lead to any operational incompatibility as long as it is wellunderstood and well-accepted by both parties that it is precisely given this divergence that the central bank is formally separated from the executive office and meant to conduct its functions in an independent manner.
The central bank can of course make mistakes, and is generally held publicly accountable through parliamentary scrutiny and transparency norms. This way, the institutional arrangement of independence, transparency and accountability to the public not only balance but also strengthen the central bank’s autonomy. However, direct intervention and interference by the government in operational mandate of the central bank negate its functional autonomy.