China’s Monetary Policy Communication: Frameworks, Impact, and Recommendations
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Summary:
Financial markets are eager for any signal of monetary policy from the People’s Bank of China (PBC). The importance of effective monetary policy communication will only increase as China continues to liberalize its financial system and open its economy. This paper discusses the country’s unique institutional setup and empirically analyzes the impact on financial markets of the PBC’s main communication channels, including a novel communication channel. The results suggest that there has been significant progress but that PBC communication is still evolving toward the level of other major economies. The paper recommends medium-term policy reforms and reforms that can be adopted quickly.
Series:
Working Paper No. 2018/244
Subject:
Banking Central bank policy rate Central banks Communications in revenue administration Financial services Market interest rates Monetary policy Monetary policy communication Monetary policy frameworks Open market operations Revenue administration
English
Publication Date:
November 16, 2018
ISBN/ISSN:
9781484385647/1018-5941
Stock No:
WPIEA2018244
Pages:
32
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