China’s Monetary Policy Communication: Frameworks, Impact, and Recommendations

By Michael McMahon, Alfred Schipke, Xiang Li

November 16, 2018

Preview Citation

Format: Chicago

Michael McMahon, Alfred Schipke, and Xiang Li. China’s Monetary Policy Communication: Frameworks, Impact, and Recommendations, (USA: International Monetary Fund, 2018) accessed November 21, 2024

Also available in: 中文

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

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.

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

Keywords: Central Bank, Central bank policy rate, China's monetary policy communication, China's monetary policy communication, Communication, Communications in revenue administration, Financial Markets, Global, Market interest rates, Monetary Policy, Monetary policy communication, Monetary policy frameworks, Monetary Policy Transmission, OMO rate, Open market operations, PBC budget, PBC communication, PBC communications, PBC forecasting resource, PBC governor, PBC interest rate change, PBC official, People’s Bank of China, Reverse repo, WP

Publication Details

Pages:

32
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2018/244
Stock No:

WPIEA2018244
ISBN:

9781484385647
ISSN:

1018-5941

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