Monetary policy communication

Abstract

Central banks have made significant efforts to improve their communication practices and broaden their audiences. Despite having inherent limitations, monetary policy communication is a crucial and influential tool for central banks. Numerous studies demonstrate that effective communication strategies can shape market expectations, guide public understanding of monetary policy decisions, and enhance the transmission of policy actions to the real economy and key financial variables. Consequently, central banks have increasingly recognized the value of clear, transparent, and forward-looking communication in achieving their policy objectives and maintaining public trust. Therefore, communication has become an integral part of the policy.