Although the impacts of monetary policy on human rights may be seen as more indirect than those of other macroeconomic policies, such as fiscal policy, they are no less important.
The indirect but significant link between monetary policy and human rights can be illustrated by two phenomena and instruments typically related to monetary policy: inflation and credit lending. Under certain circumstances, inflation can generate a very real risk of compromising the right to an adequate standard of living, creating barriers to access food, housing, and basic services.
Furthermore, anti-inflationary and credit policies can affect employment and income, interfering with the right to work and other human rights. Indeed, addressing inflation by incentivizing economic slowdown and unemployment can be detrimental to human rights.
Central Banks should not remain indifferent to the risks their decisions pose for human rights. Nor should other bodies with an impact on the “global monetary agenda,” such as the International Monetary Fund.
In this context, the Initiative for the Principles for Human Rights in Fiscal Policy highlights the importance of analyzing the relationship between monetary policy and human rights. With this aim, it advances the following basic principles to connect human rights and fiscal policy, in line with the Principles for Human Rights in Fiscal Policy:
