An explicit strategy is basically the tool with which central banks provide an analytical framework to establish consistency between a sequence of short-term monetary policy measures derived from current economic conditions and longterm objectives. An explicit rule-based strategic framework fulfils many important tasks.
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.