The Impact of Central Bank Communication on Market Interest Rates

2021 ◽  
Vol 35 (2) ◽  
pp. 1-34
Author(s):  
Won Kee Lee ◽  
Sammo Kang
Keyword(s):  
Central Bank ◽  
Interest Rates ◽  
Central Bank Communication ◽  
The Impact

scholarly journals Central Bank Communication and Policy Interest Rate

2020 ◽  
Vol 12 (1) ◽  
pp. 76
Author(s):  
Haryo Kuncoro
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Central Bank ◽  
Interest Rates ◽  
Inflation Targeting ◽  
Central Bank Communication ◽  
Inflation Expectation ◽  
Expectation Gap ◽  
The Impact ◽  
Policy Interest

Central bank communications play an important role in the monetary policy. In the inflation-targeting frameworks, central bank communications might guide public to shape inflation expectations and then determine actual inflation rates through which the policy interest rates policy would manage them. This paper studied the impact and central bank monetary policy communications on the policy interest rate. Unlike other studies, this paper uses two stages. First, we estimate the impact of central bank communication on the inflation expectation gap. Second, we use the estimated value of inflation expectation gap to predict the policy interest rate. The study found evidence that economic agents analyse the Governor Board of Central Bank of Indonesia meeting decisions every month to shape their inflation expectation. Therefore, the difference between inflation expectation and actual inflation tends to narrow. The inflation expectation gap affects the policy interest rates in Indonesia. In other words, the policy interest rates can control the inflation rate and anchor expectations as required by the inflation-targeting framework.

scholarly journals Central Bank Communication Affects the Term-Structure of Interest Rates

2015 ◽  
Vol 69 (2) ◽  
Author(s):  
Fernando Chague ◽  
Rodrigo De-Losso ◽  
Bruno Giovannetti ◽  
Paulo Manoel
Keyword(s):  
Central Bank ◽  
Interest Rates ◽  
Term Structure ◽  
Central Bank Communication

scholarly journals Pre- and Post-GFC Policy Multipliers

2020 ◽  
Vol 20 (237) ◽  
Author(s):  
Sam Ouliaris ◽  
Celine Rochon
Keyword(s):  
Central Bank ◽  
Interest Rates ◽  
Balance Sheet ◽  
Quantitative Easing ◽  
Dynamic Effects ◽  
Real Gdp ◽  
Rate Environment ◽  
The Impact ◽  
Policy Multipliers ◽  
The U.S

This paper estimates the change in policy multipliers in the U.S. relative to their pre-2008 financial crisis levels using an augmented Blanchard-Perotti model to allow for the dynamic effects of shocks to the central bank balance sheet, real interest rates and debt levels on economic activity. Given the elevated debt level and significantly larger central bank balance sheet in the U.S. after 2008, the paper estimates the likely impact of new stimulus packages. We find that expenditure multipliers have fallen post-2008 crisis because of higher government debt, implying that the effectiveness of fiscal policy has declined. The analysis also investigates the impact of quantitative easing. The results suggest that it is beneficial, but requires sizable balance sheet interventions to lead to noticeable effects on real GDP. The results are used to assess the impact of the policy packages to address COVID-19. Because of rising debt stocks, dealing with a crisis is becoming more and more costly despite the current low interest rate environment.

scholarly journals Study on the Phenomenon of Bank Liquidity Tail

2017 ◽  
Vol 6 (2) ◽  
pp. 1
Author(s):  
Hongjian Qu ◽  
Jianchun Zhou
Keyword(s):  
Central Bank ◽  
Interest Rates ◽  
Negative Impact ◽  
External Environment ◽  
Credit Rationing ◽  
Foreign Banks ◽  
Open Market ◽  
Environment Change ◽  
Supervision System ◽  
The Impact

The entry of foreign banks, the spread of financial crisis, the marketization of interest rates and the impact of the point of time assessment lead to the phenomenon of bank liquidity tail, which has a negative impact on commercial banks, the financial system and the national economy. This paper is based on the current situation of the phenomenon of bank liquidity tail, analyzes the reasons of bank liquidity tail from two aspects of management and supervision system of bank liquidity, and proceed from the inner bank, the central bank's monetary policy, the external environment and so on, to find credit mismatches, credit term structure mismatch, the end of the month to pay the deposit reserve, the central bank focused on open market operations, the external macro environment are the main factors of bank liquidity tail. Therefore, this paper puts forward some countermeasures to solve the problem of bank liquidity from the perspective of liquidity supervision system, the bank's own management mode, the central bank credit rationing and the external environment change.

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