It is especially important to limit the diffusion of the crisis within the financial sector to avoid additional negative feedback loops. In 2020 the amount of people living in extreme poverty will increase for the first time in 25 years. The number of food-insecure people could double. Countries affected by fragility, conflict and violence, especially in Sub-Saharan Africa, may be most strongly hit.
It enables observers to understand how economic data are analysed and transformed into the central bank’s assessment of the current policy stance and risks. At the same time, in doing so, it reduces the need for more continuous direct communication. Moreover, an explicit strategy helps to de-personalise the monetary policy framework and thereby to provide continuity of the decision-making process.