A Perspective on Monetary Policy Transparency and Communication

The subject of central bank communication has received growing attention in recent years, at the same time as central banks themselves have increased their efforts at communicating with the public. One reason for these trends has been the strengthening of central bank independence, which has brought with it a corresponding focus on public accountability. Another factor has been an increasing recognition of the broader importance of good communication for promoting confi dence in the policy regime and creating a stable environment for expectations. This requires, among other things, that the thinking behind monetary policy decisions be clearly explained. The efforts made by central banks in that direction over the past decade or so can be summed up under the general heading of increased transparency.