scholarly journals A Text Mining Analysis of Central Bank Monetary Policy Communication in Nigeria

2020 ◽  
pp. 73-107
Author(s):  
Mohammed M. Tumala ◽  
Babatunde S. Omotosho
Keyword(s):  
Monetary Policy ◽  
Text Mining ◽  
Central Bank ◽  
Communication Strategy ◽  
Central Bank Communication ◽  
Monetary Policy Committee ◽  
Textual Data ◽  
Policy Communication ◽  
Policy Objectives ◽  
Monetary Policy Transparency

This paper employs text-mining techniques to analyse the communication strategy of the Central Bank of Nigeria (CBN) during the period 2004-2019. Since the policy communique released after each meeting of the CBN’s monetary policy committee (MPC) represents an important tool of central bank communication, we construct a corpus based on 87 policy communiques with a total of 123, 353 words. Having processed the textual data into a form suitable for analysis, we examined the readability, sentiments, and topics of the policy documents. While the CBN’s communication has increased substantially over the years, implying increased monetary policy transparency; the computed Coleman and Liau readability index shows that the word and sentence structures of the policy communiques have become more complex, thus reducing its readability. In terms of monetary policy sentiments, we find an average net score of -10.5 per cent, reflecting the level of policy uncertainties faced by the MPC over the sample period. In addition, our results indicate that the topics driving the linguistic contents of the communiques were influenced by the Bank’s policy objectives as well as the nature of shocks hitting the economy per period.

Do monetary policy transparency and central bank communication reduce interest rate disagreement?

2019 ◽  
Vol 39 (3) ◽  
pp. 368-393
Author(s):  
Ruttachai Seelajaroen ◽  
Pornanong Budsaratragoon ◽  
Boonlert Jitmaneeroj
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Central Bank ◽  
Central Bank Communication ◽  
Monetary Policy Transparency

scholarly journals Central Bank Communication and Monetary Policy: A Survey of Theory and Evidence

2008 ◽  
Vol 46 (4) ◽  
pp. 910-945 ◽  
Author(s):  
Alan S Blinder ◽  
Michael Ehrmann ◽  
Marcel Fratzscher ◽  
Jakob De Haan ◽  
David-Jan Jansen
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Financial Markets ◽  
Real World ◽  
Communication Strategies ◽  
Central Banks ◽  
Communication Strategy ◽  
Scholarly Literature ◽  
Central Bank Communication ◽  
Almost All

Over the last two decades, communication has become an increasingly important aspect of monetary policy. These real-world developments have spawned a huge new scholarly literature on central bank communication—mostly empirical, and almost all of it written in this decade. We survey this ever-growing literature. The evidence suggests that communication can be an important and powerful part of the central bank's toolkit since it has the ability to move financial markets, to enhance the predictability of monetary policy decisions, and potentially to help achieve central banks' macroeconomic objectives. However, the large variation in communication strategies across central banks suggests that a consensus has yet to emerge on what constitutes an optimal communication strategy.

Through a Crystal Ball Darkly: The Future of Monetary Policy Communication

2018 ◽  
Vol 108 ◽  
pp. 567-571 ◽  
Author(s):  
Alan S. Blinder
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
General Public ◽  
Crystal Ball ◽  
Central Bank Communication ◽  
Policy Communication ◽  
The Future ◽  
Great Confidence ◽  
Monetary Policy Committees ◽  
Over Time

I make six predictions about the future of central bank communication about monetary policy. Some are made with great confidence, like: transparency will increase over time. Others are far riskier, like: attempts to communicate with the general public, though laudable, will fail. I also suggest ways in which the so-called cacophony problem on monetary policy committees (speaking with too many voices) can be mitigated.

scholarly journals Central Bank Communication and Monetary Policy Predictability under Uncertain Economic Conditions

2019 ◽  
Vol 8 (2) ◽  
pp. 5-32
Author(s):  
Jonne O. Lehtimäki ◽  
Marianne Palmu
Keyword(s):  
Monetary Policy ◽  
Financial Crisis ◽  
Central Bank ◽  
Policy Instrument ◽  
Central Banks ◽  
Short Term ◽  
Policy Makers ◽  
The Public ◽  
Central Bank Communication ◽  
Monetary Policy Transparency

Abstract Modern central banks increasingly value monetary policy transparency, and attempt to build credibility by communicating their decisions to the public. This paper studies whether the communication of central banks can be used to explain upcoming changes in their most important monetary policy instrument, the short-term refinancing rate, and whether the public can trust central bank communication during times of financial crisis. This is done by constructing an indicator to measure the predictability of monetary policy by calculating the median of the policy makers’ official comments. The performance of this indicator is studied with ordered probit methods. The results show that predictability was reached relatively well at central bank level during the financial crisis despite the rapid growth of economic uncertainty, and that communication can be a useful tool for central banks during uncertain times.

scholarly journals Mexico’s Monetary Policy Communication and Money Markets

2019 ◽  
Vol 11 (2) ◽  
pp. 81
Author(s):  
Alicia Garcia-Herrero ◽  
Eric Girardin ◽  
Arnoldo Lopez-Marmolejo
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Financial Markets ◽  
Strong Evidence ◽  
Money Market ◽  
Significant Rise ◽  
Money Markets ◽  
Governing Body ◽  
Central Bank Communication ◽  
Policy Communication

Central bank communication is becoming a key aspect of monetary policy. How much financial markets listen and, possibly, understand Banco de Mexico’s communication on its monetary policy stance should be a key consideration for the central bank to further modernize its monetary policy toolkit. In this paper, we tackle this issue empirically by using our own index of the tone of communication based on Banco de Mexico’s speeches and statements and find that Mexican money markets do not only listen but they also understand the stance of monetary policy conveyed in the central bank’s words. Regarding the ability to listen we find that both the volatility and volume in the money market rates change right after communication from Banco de Mexico’s governing body. As for the markets’ understanding, we document a statistically significant rise in money market rates the more hawkish communication is. All in all, our results show strong evidence of effective oral and written communication from the Central Bank towards Mexico’s money markets.

scholarly journals Central Bank Communication and Monetary Policy: A Survey of Theory and Evidence

2008 ◽  
Author(s):  
Alan Blinder ◽  
Michael Ehrmann ◽  
Marcel Fratzscher ◽  
Jakob De Haan ◽  
David-Jan Jansen
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Central Bank Communication

The czech experience with inflation targeting in transition

2000 ◽  
Vol 9 (3) ◽  
Author(s):  
Kateřina Šmídková ◽  
Miroslav Hrnčíř
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Inflation Targeting ◽  
Central Banks ◽  
Communication Strategy ◽  
The Other ◽  
Short Term ◽  
Countries In Transition ◽  
The One

This paper argues that inflation targeting is a strategy that can be under certain conditions adopted by central banks in countries in transition even though their typical goal is to disinflate instead of stabilising low inflation. On the one hand, according to the Czech experience, inflation targeting offers several benefits, such as increasing control over expectations and short-term flexibility of monetary strategy, that are attractive for economy in transition. On the other hand, constraints imposed by period of transition as well as by openness of economy are present no matter which monetary strategy is chosen by the central bank. Implied costs should not be attributed to a particular monetary strategy. Inflation targeting has made various factors constraining monetary policy more visible and, as a result, requirements on the quality of decisions as well as on communication strategy have increased.

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