Central bank mandates balancing inflation, growth and financial stability shape policy choices and institutional design in emerging economies.
Emerging economy central banks must recalibrate mandates and tools beyond single-objective models to manage the inflation-growth trade-off, global capital-flow volatility under the "impossible trinity," risks of fiscal dominance, and the need to safeguard financial stability. This requires judicious responses to supply shocks, managed openness on exchange rates and capital accounts, credible fiscal consolidation to preserve monetary independence, possible central-bank responsibility for systemic-risk regulation and supervision, and careful use of conditional forward guidance tied to institutional credibility.