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Jakarta Post

Central banking and its relativity amid COVID-19

  • Kristianus P. Isyunanda

Jakarta   /   Tue, May 19 2020   /  01:20 am

Economic consequences of the pandemic have caused extraordinary dynamics not only in the macroeconomic environment but also for central banking activities.

Disruption in productivity due to COVID-19, which has severely hit domestic economies, has forced governments and authorities to take distinct and swift measures to fight the effect of the pandemic on the economy and the financial sector. While many governments have undertaken such an approach, the “joint venture” between monetary and fiscal policy has earned the spotlight.

In the European Union, a recent verdict from the German Constitutional Court relates to such a “monetary-fiscal policy” scheme. The court ruled that a prior decision by the Court of Justice of the EU was beyond the court’s powers, effectively placing more judicial scrutiny on public sector asset purchase programs through which the European C...