As the Governor of the Bank of Lithuania and a member of the ECB Governing Council, today I will talk about communicating monetary policy – and not only about the ECB experience, but central bank communication in general – as part of the larger policy toolkit. We’ve just heard stimulating presentations regarding the effects of forward guidance.
The latter has become an essential tool to preserve an accommodative stance in the low interest rate environment that we have been witnessing in many advanced economies. Forward guidance – in any form it comes – is used to influence market expectations by clearly communicating about possible future policy moves.