Monetary policy frameworks in the six countries also differ somewhat in the degree
of autonomy of the central bank in carrying out monetary policy and in the instruments
used. In two countries, the Philippines and Indonesia, the central bank has been given
legal autonomy to carry out monetary policy. In the other countries, in general, the
central bank is directly accountable in some form to the government, and its policies in
some cases are either made by the government or must be approved by it. Decisions on
interest rates by the People’s Bank of China in China and by the State Bank of Vietnam
in Viet Nam must be approved by the government. Moreover, the specific final targets of
monetary policy are typically determined by the government, or subject to its approval;
the government sets the inflation target in the Philippines and Indonesia, for example.
Central banks are all formally required to report on their activities to the government
and the public. These requirements are necessary to sustain the public support for and
understanding of monetary policies that is critical to their effectiveness