Central Bank Chief Warns Court Case Could Threaten Institutional Independence

The head of the nation’s central bank warned Wednesday that a pending case before the highest court could reportedly have far-reaching consequences for the institution’s independence and the country’s economy, according to observers familiar with the proceedings.

“I would say that that case is perhaps the most important legal case in the [central bank’s] 113-year history,” the central bank chief reportedly told journalists at the institution’s headquarters in the capital. “As I thought about it, it might have been hard to explain why I didn’t attend.”

The official referenced historical precedent, noting that a former central bank head had attended a similar court proceeding in the 1980s during an earlier period of institutional tension.

Last week, the nation’s highest court reportedly heard oral arguments for two hours on whether the current head of state has the authority to remove a sitting central bank governor. The court is expected to issue a ruling in the case by summer, according to legal observers.

The governor’s legal fight traces back to late August, when the leader allegedly moved to remove her from the board, citing claims that she had misrepresented information related to financial arrangements obtained before joining the central bank. The official has denied any wrongdoing and has not been charged with a crime, according to sources close to the matter.

She subsequently filed suit in federal court in the capital to block her removal. In September, a district court judge reportedly barred the leader from dismissing her while the case proceeds, a decision later upheld by an appeals court.

Her appointment to the central bank was notable from the start. Selected by the previous head of state in 2022, she became the first member of her demographic group to serve on the seven-member panel that sets national interest rates and oversees the banking system.

Now, she stands at the center of what observers describe as an even more consequential moment, as the current leader seeks to dismiss her—a step that would reportedly be unprecedented in the central bank’s history.

Meanwhile, the central bank chief’s insistence on finishing his term, which ends in May, now comes amid a criminal investigation by the justice ministry into his legislative testimony regarding the institution’s headquarters renovation, according to reports.

The official confirmed the investigation and said he respected the rule of law and legislative oversight, but described the action as “unprecedented” and allegedly driven by political pressure.

When pressed by journalists for further comment, the central bank head declined to discuss the justice ministry investigation, pointing instead to remarks he made in a public statement earlier this month.

His decision to address the issue so publicly, after days of private consultations with advisors, marked what observers called a sharp departure from the central banker’s typically measured approach.

What comes next remains unclear, as the central bank navigates what analysts describe as largely uncharted territory in the nation’s institutional history.