Mr. Chairman, transparency and policy credibility that underpin forward-looking monetary policies and market-based prudential regulations call for effective central bank communication. To quote the Deputy Governor of the Federal Reserve Bank of New Zealand, “central banks’ pronouncements have economic and social impact”. Therefore, central bank communication strategies must be underscored by accountability and transparency.
This involves deepening understanding of economic relationships and their ultimate impact on inflation, and signalling monetary policy actions which provide forward guidance to market participants. 11. It is for these reasons that communication has become an additional tool in the kitty of the central banker.