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---

### Executive Summary — overall assessment and key strengths
- The CBA fully recognizes and understands the role of communications in modern central banking.
- Progress and alignment:
  - Progress in external communications aligned with gradual transition to an Inflation Targeting (IT) regime and strong commitment by new CBA management to openness and transparency.
  - External stakeholders (journalists and financial market players) note notable improvement and regular, open dialogue.
- Established elements and tools:
  - Communications Division (CD) plays a central role despite limited resources.
  - Internal documents guide external communications; internal processes for developing and releasing communication messages are well established but not formalized.
  - Communication Strategy recently updated; CD manages a Questions and Answers (Q&A) file and has a monthly communication plan.
  - CBA website is a key channel and contains much information; further upgrade planned.
  - Flagship policy publications: Monetary Policy Review (MPR) and Financial Stability Review (FSR), supplemented by press releases, working papers, and other publications.
  - Engagement channels: regular meetings (banking community and analysts), ad-hoc events, training seminars, and workshops.

### Executive Summary — monetary and macro context (selected figures)
- Inflation:
  - Inflation rose to 14.4 percent (year-one-year) in December 2022, then declined to 3.5 percent in September 2024.
  - Core inflation declined from 14 percent in December 2022 to 2.9 percent (year-one-year) in September.
- Policy response:
  - CBA reduced the policy rate by 175 basis points in the last eighteen months.
  - CBA significantly increased reserve requirements to mop up excess liquidity.

### Executive Summary — constraints and priorities
- Constraints: limited market development and low financial literacy may limit communication progress.
- Priority actions highlighted:
  - Strengthen role and capacity of the Communications Division.
  - Formalize the communication framework (Communication Policy, Social Media Strategy, Annual Plan of Communications; update RITM).
  - Shift from reactive to proactive external communications with improved planning, reporting, and message management.
  - Establish regular assessment framework: expand media monitoring, stakeholder surveys, and advanced evaluation methods.
  - Enhance monetary policy communications: synchronize MPR with interest rate decision cycle, emphasize forward-looking content and regular macroeconomic projections, set specific weekday release dates, schedule regular stakeholder meetings post-decisions, and strengthen CD participation in drafting monetary policy messages.
  - Consider further IMF advice: measuring effectiveness of policy communications, enhancing financial stability communication, and requesting the IMF Central Bank Transparency (CBT) Review.

### Recommendations (summary from Table 1)
- Communication Framework and Organization
  - Update and expand CBA Rules on Information Transmission to Media to transform it into Communication Policy (¶14–15). Priority: High. Timing: Medium-term.
  - Increase the resources of the Communications Division and upgrade its skills mix (¶20). Priority: High. Timing: Near-term.
  - Integrate the Communications Division more closely with other departments and decision-making processes (¶21). Priority: High. Timing: Near-term.
  - Ensure well-rounded short-, medium- and long-term communications planning (¶26–28). Priority: Medium. Timing: Near-term.
  - Accelerate the shift from a reactive to a proactive external communication policy, supported by an internal message management process (¶36–39). Priority: Medium. Timing: Medium-term.
  - Establish a framework for the regular assessment of the effectiveness of its communications (¶43–46). Priority: Medium. Timing: Medium-term.
- Monetary Policy Communications
  - Elevate the Monetary Policy Review to the role of a flagship publication (¶67–68). Priority: High. Timing: Near-term.
  - Expand outreach on monetary policy communications and promote the use of tiered communication practices (¶75–76). Priority: Medium. Timing: Medium-term.
  - Streamline the monetary policy communication cycle (¶81–84). Priority: High. Timing: Near-term.
- Timing clarification
  - Near-term < 12 months; Medium-term 12 to 24 months.

### Introduction — mandate, operational changes, and communications modernization
- Mandate and operational stance:
  - Legislative mandate: price stability operationalized by the inflation target of 4±2 percent.
  - The CBA maintains a (de facto) fixed exchange rate to the U.S. dollar and considers it effective for controlling inflation in Azerbaijan’s undiversified economic setting.
  - Authorities considering strategy emphasizing interest rates rather than monetary aggregates and increased exchange rate flexibility in the long run.
  - Operational overhaul: introduced standing facility tools and redesigned open market operations instruments.
- Financial sector governance:
  - Post-2019, following dissolution of the Financial Markets Supervisory Authority, CBA became main regulator of banks, non-bank credit organizations, insurance companies, capital markets/investment companies, and payment systems.
  - In 2022, CBA was given an official financial stability mandate.
- Communications modernization:
  - Regular publication of MPR (quarterly); press releases on interest rate decisions made according to preannounced calendar.
  - Annual policy document “The Main Directions of Monetary Policy for 2024” reiterates commitment to open and transparent communication.
  - CBA plans to expand scope of monetary policy communications and make them more effective by broadening focus and enhancing tools and channels.

---

### I. Institutional Communications Framework — assessment and recommendations
- Importance and desired elements:
  - Principles: clarity, timeliness, precision, consistency, predictability, transparency, and equal access to information.
  - Framework should cover objectives, principles, spokespersons, messages, audiences, channels, tools, formats, and effectiveness assessment.
  - Internal organization: flow of information, procedures, guidelines, structure and staffing.
  - Communications products: calendar of policy decisions, press releases, press conferences, periodic reports, minutes, speeches, social media, interviews.
- Current situation — strengths and gaps:
  - Activity: numerous reports, articles, statements, and speeches; rising social media intensity.
  - Demand: target audiences want more policy content, analysis, and data in social media posts; stakeholders praise responsiveness and professional qualifications of CD staff.
  - RITM (Rules on Information Transmission to Media): developed 2013, amended 2017, described as foundational in 2024–2026 Communications Strategy but has gaps and needs updating (e.g., reflects relocation of CD to Governor’s Office).
  - Principles not formally established in strategy documents; communications on policy process lack full predictability, precision, and equal access (see Paragraph 65).
  - Accessibility can be enhanced with more accessible language and explanations.
- Elements established:
  - Objectives: (i) enhance effectiveness of monetary policy by strengthening public understanding and trust; (ii) help shape expectations of market participants and broader public.
  - Spokespersons: Governor, Board Members, Executive Directors, Department Directors, press secretary; areas of responsibility not delineated.
  - Messages: internal processes exist; responsibility rests with Management Board; CD not involved in policy deliberations or message formulation.
  - Audiences: well defined; targeting could be improved; some find communications too technical.
  - Channels and formats: active social media, website as intermediary-free channel; recommendation to post complete transcripts and video files of press conferences; more infographics and videos for non-technical audiences.
  - No defined corporate identity; publications vary in visual style.
- Recommendation 1: Update and expand RITM into a Communication Policy
  - Expand coverage: principles, interdepartmental procedures, planning and assessment approaches, guidance on using other departments’ materials, social media guidance.
  - Updated version to be approved by Management Board and used as CBA Communications Policy.
  - Distinguish strategic issues (RITM) from operational issues (separate divisional documents).
  - Divisional documents: update CD terms of reference; develop division manual for monitoring, media requests registry, visual materials approach, and other operational processes.
- Recommendation 2: Refine communication channels, tools, and formats
  - Simplify policy messages and establish a uniform corporate identity.
  - Adopt advanced communications techniques; produce a brand book.
  - Produce a Glossary of Technical Terms and Their Less Technical Equivalents for non-technical communications.

### Organizational structure — current situation and recommendations
- Current situation:
  - Communications Division (CD) has six employees; Division Head position vacant.
  - Relocated to Governor’s Office from International Cooperation and Communications Department.
  - Interdepartmental work processes not formalized; information often technical and requires redrafting, causing delays and reputational risk.
  - Senior communications staff not present in policy deliberations; CD lacks awareness of upcoming decisions and cannot advise on reception or messaging.
  - Need for internal guidance on CD handling of proposals for publicizing products/events and staff presence on social media.
- Recommendation 3: Increase resources and upgrade skills mix
  - Priority to add three staff positions dedicated to:
    - (i) content creation;
    - (ii) graphic design;
    - (iii) creation of video materials.
  - Medium-term: consider further increasing number of staff and skill set.
- Recommendation 4: Integrate CD more closely with other departments and decision-making
  - CD management and staff should be routinely included in policy discussions and drafting of policy messages.
  - Develop internal guidelines on cooperation between CD and policy departments and on staff’s social media presence.

---

### Communications planning, message management, and assessment
- Current planning:
  - 2024–2026 Communication Strategy and RITM do not establish cyclical communication planning.
  - CD develops a monthly calendar plan based on officials’ engagements, publication schedules, and structural unit plans.
  - Monthly plan excludes media engagements (interviews/op-eds) and is supplemented by an Activity Plan that is operational rather than strategic.
  - Internal reporting limited: twice-daily media monitoring report (listing media mentions) and semiannual Activity Plan implementation report.
  - No periodic reporting on volume or effectiveness of communications.
- Recommendation 5: Create an ecosystem for managing communications processes
  - Monthly plan enhancements:
    - Include expected media engagements.
    - Switch to a rolling monthly plan updated at least biweekly.
    - CD to participate in decisions on need/timing of communications.
  - Monthly social media content plan: introduce detailed monthly plan for platform-differentiated content.
  - Annual plan: strategic-level planning of communication cycles and campaigns with semiannual updates.
  - Reporting aligned to plans: analytical reports (weekly/biweekly/monthly), semiannual/annual implementation reporting, and results discussed with leadership to inform updates.
- Message management — current situation:
  - 28 authorized spokespersons; no internal guidelines documenting one-voice institutional position transfer to spokespersons.
  - Q&A file is central, updated occasion-based before press conferences, distributed to senior officials.
  - Reactive communications predominate; lack of proactive message formation beyond core strategic messages.
  - Press releases focus on facts, not structured to convey rationale, objectives, expected outcomes, or future policy path.
  - Content development ownership fragmented: functional departments initiate press releases and analytical reports; CD limited to proofreading and dissemination; CD fully manages social media.
  - Late CD involvement limits readability tailoring and audience-specific messaging.
- Recommendation 6: Shift from reactive to proactive communications and strengthen message management
  - Move from ad-hoc talking points to message formation in advance and regularly (e.g., weekly).
  - Deliver messages proactively in line with predictable communication cycles or ad-hoc for FX communications.
  - Expanded toolkit to include:
    - Key policy messages aligned with objectives and target audiences.
    - Message boxes with supporting arguments, data, and evidence.
    - Q&A file updated before interviews and public appearances; maintain universal and customized topical versions.
  - Strengthen CD role: formally responsible for message management, involved early with functional departments, produce internal materials, oversee clarity/consistency, be responsible for content development and audience customization.
  - Institutionalize toolkit and roles in Communication Policy; require spokespeople to follow approved messages and conduct regular training.

### Monitoring and assessment — current situation and recommendations
- Current monitoring:
  - CD manually monitors approximately 50 local and 10 international media sources daily.
  - Media monitoring report produced twice a day; semiannual Activity Plan report produced.
  - Raw data (media requests DB, website analytics, social media analytics, surveys) underused for decision-making.
- Recommendation 7: Establish framework for regular assessment of communications effectiveness
  - Expand monitoring to more outlets and include social media.
  - Move from manual monitoring to specialized software or outsource to contractor.
  - Maintain a database tracking number of communication activities and owned-channel statistics.
  - Conduct periodic surveys to assess:
    - level of trust in the central bank;
    - awareness of mandate;
    - awareness of monetary policy objective and inflation target;
    - confidence in central bank’s ability to reach objectives.
  - Survey a wider range of stakeholders on inflation expectations (including firms) to evaluate monetary policy communication effectiveness over time.
- Capacity-building and cooperation:
  - Enhance internal capacity through training and cross-departmental rotation.
  - CD to cooperate closely with Research Department, Statistics Department, and Monetary Policy Department on:
    - studying impact of trust and communications on inflation expectations;
    - testing publications for readability using computational linguistics.

---

### Crisis communications — principles and preparedness
- Key principles:
  - Objective: transmit confidence to prevent or end creditor runs; communications must be part of comprehensive policy package.
  - Communicate who is affected and what is being done; answer depositors’ basic concerns (Is my money safe? Can I conduct normal banking business? Will I have access to funds?).
  - Deliver news in clear, definitive, but not alarming terms; avoid communicating problems without solutions; do not overpromise.
  - Speak with one voice; coordinate across government and financial agencies.
  - Prepare for “media wars” and ensure strong unified responses.
  - Prepare in advance where possible.
- Existing CBA protocol (RITM):
  - Lists possible early warning indicators and describes forming a crisis communications group including all spokespersons.
  - Requires review of crisis communications plan and scenarios; activation of a 24/7 hotline and special website mode if warranted; postcrisis assessment required.
- Recommendation 8: Hold a crisis simulation exercise
  - Benefits: test protocol, build ability to “think on their feet,” fine-tune crisis communications procedures and plans, and improve preparedness.
- Crisis preparedness measures recommended:
  - Develop crisis communication plans for “known unknown” crises with baseline and alternative scenarios, messages for different channels, and distributed speaking roles.
  - Use communications precrisis to mitigate foreseeable crises with proactive messaging on high-probability risks and triggers.
  - As crisis unfolds, evolve messaging from toolkit description to pending measures to measures taken and outcomes.

---

### Monetary policy communication — assessment and recommendations
- Role and current progress:
  - Communication is crucial to implement monetary policy and build public trust by articulating objectives, strategy, decisions, expected developments, and constraints/risks.
  - CBA has revised and improved practices during monetary policy modernization; transition to IT will require further improvements.
  - Stakeholders call for simplification of information; most available information is descriptive and backward-looking.
- Strategic documents and reporting:
  - Two high-level documents embed monetary policy strategy:
    - “Socio-economic development Strategy of the Republic of Azerbaijan for 2022–2026” defines numerical inflation target for the CBA.
    - “Main Directions of Monetary policy” produced annually and conveyed to Office of the President and Parliament; includes calendar of policy decision announcements regarding the refinancing rate for the upcoming calendar year.
  - Annual Report and Report on the Accomplishment of the Main Goals and Functions prepared annually per the Central Bank Law; recommendation to streamline and incorporate more visuals.
  - MPR (quarterly) not synchronized with policy rate decision cycle; has begun to include macroeconomic forecasts for the first time.
  - Operational framework described in standalone “Manual on Operational Framework.”
- Press releases and conferences:
  - Press releases issued after each Board meeting; quality improved, prepared by MPD; CD not involved in preparing content.
  - Minutes of Board policy meetings are not published.
  - Four press conferences per year following Board decisions; Governor delivers speech and Q&A; media often deviate from policy-rate focus.
  - Considerations: post Governor’s speeches on website; provide simultaneous translation or English subtitles.
- FX-related communications:
  - Exchange rate is primary operating target per “Main Directions of Monetary Policy.”
  - FX auctions: parameters well known; State Oil Fund projects annual FX volumes distributed evenly; auctions on Bloomberg Auction Platform communicated one hour before; post-trading information disclosed right after auctions via short press release.
  - Information on FX interventions less openly available: intervention dates known in advance; intervention volumes and FX reserves figures published with some delay.
  - Recommendation: streamline FX communication practices, communicate FX issues through prism of price stability, improve transparency on exchange rate policy frameworks and outcomes, include detailed FX information in MPR, consider publishing timely information on FX interventions and reserves.
- Stakeholder feedback:
  - Substantial improvements noted, but gaps remain: lack of regular analytical products on inflation, banking system, monetary policy, and interbank market developments.
  - MPR mostly descriptive and backward-looking despite reshaping efforts.
  - Need to customize monetary policy products to different audiences to simplify messages.
- Clarity vs transparency:
  - Transparency improved; stakeholders demand greater clarity on how CBA expects to reach objective.
  - Clarity requires institutionalized message management, understanding transmission mechanisms, and public education.
  - Challenge: transition from quantity-based to price-based instruments.
- Tiered communication:
  - Some tiering exists; a multitiered framework recommended to tailor messages and enhance transparency and trust, especially during crises.

- Recommendation 9: Elevate the Monetary Policy Review to flagship publication
  - MPR should be main vehicle for communicating monetary policy with analysis of recent developments, comprehensive vision of future economic trends, and explanation of monetary policy reaction function.
  - Incorporate macroeconomic forecasts and scenarios, monetary analysis, and risk assessment.
  - Each MPR to begin by reiterating policy objective and include an “Executive or Non-technical Summary” drafted with CD.
  - Include section on previous monetary policy decisions to show changes over time.
  - Incorporate FPAS materials into MPR as quarterly starting point.
  - Publication logistics: follow announced calendar, fixed time, and clear delineation between policy-message products and technical background.
- Recommendation 10: Press releases as main tool for immediate policy communication
  - Press release should be first source of information on monetary policy decisions and posted on official website first on scheduled day/time.
  - Social media to amplify announcements.
  - Update policy announcement calendar on designated webpage tab with dates of announcements, times of Board meetings and press conferences, and dates of MPR publication in each language.
  - Press release content: more policy focused, forward looking, brief; titles should reflect actual decisions (example provided).
  - Continue refining to focus on reasons for decision, economic outlook, and risks.
- Recommendation 11: Clearly communicate current monetary policy decision-making arrangement
  - Make decision-making arrangement (frequency, advisory MPFSC role, five-week cycle, silence period) transparent and predictable.

### Communication cycle and process recommendations
- Current arrangement:
  - Management Board decides key policy rate eight times a year, four of which followed by press conferences (five-week cycle).
  - The announcement day is scheduled in advance but can vary within the week (typically Wednesday to Friday).
  - Management Board decision made at least two days before announcement; press release scheduled lately at 11:00 AM.
  - Internal processes fragmented; MPD leads content in all languages; newly established Monetary Policy Communication Division within MPD could help.
- Recommended cycle and sequencing:
  - Build cycle around MPR and establish fixed-time routine.
  - Recommended sequencing:
    - Fix Board meetings for a certain day of the week (commonly Tuesdays/Wednesdays/Thursdays).
    - Same or following day at preset time publish press release in two languages.
    - Simultaneously (or within one hour) schedule Governor’s press conference.
    - One or two weeks later, publish MPR in two languages.
    - After MPR publication, hold meetings with expert community and market participants.
  - Drafting enhancements:
    - One week prior to Board meeting, MPD and CD to form three or more key monetary policy messages, draft press release and Governor’s speech, include these in Board package for approval.
    - Internal coordination to ensure one-voice messages and tiered messaging for different target groups.
    - CD Head participation in Board meeting recommended; attendance should be limited to preserve confidentiality.
  - Press conferences and minutes:
    - Consider holding press conferences after each Board meeting; short briefings acceptable when new forecasts are not available.
    - Publishing minutes of interest rate-setting meetings identified as best practice; practices vary on detail, attribution, voting outcomes, and timing.

### Communication techniques, audience segmentation, and evaluation metrics
- Techniques:
  - Use accessible language without altering meaning; tiered messages at two or three technicality levels.
  - Apply behavioral insights and audience segmentation.
  - Tiering by channels: adapt message for print, television, radio, video, online, and social media.
- Evaluation indicators (selected measurable elements):
  - Number of communication activities and breakdown by proactive vs reactive and by product.
  - Website metrics: total users, new users, growth rates, visits around policy decisions, topic breakdown, traffic sources, most-read publications.
  - Social media metrics: followers and growth, views/impressions, interactions, click-through rates.
  - Media and social media monitoring: volume of mentions, share by channels, share of publications generated by central bank, audience outreach, topic/narrative analysis, sentiment analysis, penetration of key messages (signal-to-noise ratio).
  - Surveys: inflation expectations (households, experts, analysts, corporations), levels of trust and confidence, public knowledge of mandate and tools.

---

### Follow-up, implementation, and broader conclusions
- Follow-up technical assistance:
  - Follow-up missions recommended to support implementation and review other aspects of central bank communication.
  - Additional TA priorities: measuring effectiveness of policy communications; dedicated advice on financial stability communications; consider requesting IMF Central Bank Transparency review in the coming years.
- Strategic conclusion:
  - Progress in communication must be accompanied by consistent policy actions to grow credibility.
  - Transition to inflation targeting is complex and could take many years.
  - Credible commitment—"by saying what it does and by doing what it says"—is essential for bolstering credibility and enhancing communications’ role in fulfilling the central bank’s mandate.

_Italic: IMF Technical Assistance Report — Preface, Executive Summary, Recommendations, and Introduction (extracted content)._

### Preface ................................................................................................................

### Preface

### Mission details and purpose
- At the request of the Central Bank of the Republic of Azerbaijan (CBA), an IMF Monetary and Capital Markets (MCM) Department mission held virtual discussions with the authorities on June 10–14, 2024, and visited Baku, Azerbaijan, from June 20–28, 2024, to assist the CBA in modernizing its communication framework.
- Mission team led by Dmytro Solohub (MCM) and comprised Olga Stankova (COM), Altynai Aidarova (CCAMTAC), and Olena Sniezhko (External Expert).
- Purpose: assist the CBA in strengthening communications by diagnosing the current framework and providing recommendations to enhance the institutional communication framework, operationalize a comprehensive communication strategy, strengthen the role of the communication unit, and review communication tools and channels.
- Additional focus: enhancing monetary policy communications, advising on structure and content of key policy documents, and streamlining the monetary policy communication cycle.

### Consultations and stakeholders met
- Meetings with CBA officials: Mr. Vugar Ahmadov, Executive Director; Mr. Ulvin Aliyev, Head of the Governor’s Office; Mr. Azer Alasgarov, Head of the Monetary Policy Department; Mr. Elrad Seydiyev, Head of the Financial Markets Operations Department; and key staff from the Communications Division, Monetary Policy Department, Department of Research, Statistics Department, and Financial Stability Department.
- Meetings with representatives from the Baku Stock Exchange, several commercial banks, local think tanks, journalists, and economic experts.
- Coordination support acknowledged: Mr. Tariyel Mirzayev, CBA International Cooperation Department.

---

### Executive Summary

### Overall assessment
- The CBA fully recognizes and understands the role of communications in modern central banking.
- The CBA has made significant progress in external communications in recent years, aligned with the gradual transition to an Inflation Targeting (IT) regime and strong commitment by the new CBA management to openness and transparency.
- Communication efforts are widely recognized by external stakeholders, including journalists and financial market players, who note notable improvement and regular, open dialogue.

### Existing strengths and tools
- Key elements of the communications framework are in place:
  - Communications Division (CD) plays a central role despite limited resources.
  - Internal documents guide external communications; internal processes for developing and releasing communication messages are well established but not formalized.
  - Communication Strategy recently updated; CD manages a Questions and Answers (Q&A) file and has a monthly communication plan.
- Tools and channels:
  - CBA website is a key channel and contains much information; further upgrade planned.
  - Flagship policy publications: Monetary Policy Review (MPR) and Financial Stability Review (FSR), supplemented by press releases, working papers, and other publications.
  - Engagement via regular meetings (banking community and analysts), ad-hoc events, training seminars, and workshops.

### Monetary policy communications
- Monetary policy communication cycle is relatively well established and largely consistent with an IT central bank framework:
  - Calendar of interest rate press releases published in advance.
  - Four monetary policy press conferences held annually.
  - Quarterly MPR published.
  - Post-transition to a new monetary policy operational framework, CBA published detailed guidelines on the new system.
  - Role of the (fixed) exchange rate regime in the monetary policy framework is fully disclosed.

### Constraints and risks
- Progress risks reaching limits due to internal and external factors, notably limited market development and low financial literacy.
- While external constraints are beyond direct central bank control, swift adoption of the mission’s recommendations would lay foundations for a comprehensive communications approach and elevate communications to a policy tool supportive of price and financial stability.

### Identified areas for improvement (summary)
- Strengthen role and capacity of the Communications Division.
- Formalize the communication framework further (e.g., Communication Policy, Social Media Strategy, Annual Plan of Communications; update RITM).
- Shift from reactive to proactive external communications with improved planning, reporting, and message management.
- Establish framework for regular assessment of communications effectiveness: expand media monitoring, stakeholder surveys, and advanced evaluation methods.
- Enhance communications around monetary policy decisions: synchronize MPR with interest rate decision cycle, emphasize forward-looking content and regular macroeconomic projections, set specific weekday release dates, schedule regular stakeholder meetings post-decisions, and strengthen CD participation in drafting monetary policy messages.
- Consider further IMF advice: measuring effectiveness of policy communications, enhancing financial stability communication, and requesting the IMF Central Bank Transparency (CBT) Review.

---

### Recommendations

### Key recommendations (from Table 1)
- Communication Framework and Organization
  - Update and expand CBA Rules on Information Transmission to Media to transform it into Communication Policy (¶14–15). Priority: High. Timing: Medium-term.
  - Increase the resources of the Communications Division and upgrade its skills mix (¶20). Priority: High. Timing: Near-term.
  - Integrate the Communications Division more closely with other departments and decision-making processes (¶21). Priority: High. Timing: Near-term.
  - Ensure well-rounded short-, medium- and long-term communications planning (¶26–28). Priority: Medium. Timing: Near-term.
  - Accelerate the shift from a reactive to a proactive external communication policy, supported by an internal message management process (¶36–39). Priority: Medium. Timing: Medium-term.
  - Establish a framework for the regular assessment of the effectiveness of its communications (¶43–46). Priority: Medium. Timing: Medium-term.

- Monetary Policy Communications
  - Elevate the Monetary Policy Review to the role of a flagship publication (¶67–68). Priority: High. Timing: Near-term.
  - Expand outreach on monetary policy communications and promote the use of tiered communication practices (¶75–76). Priority: Medium. Timing: Medium-term.
  - Streamline the monetary policy communication cycle (¶81–84). Priority: High. Timing: Near-term.

- Timing clarification
  - Note: Near-term < 12 months; Medium-term 12 to 24 months.

---

### Introduction

### Mandate, framework, and recent operational changes
- CBA legislative mandate: price stability operationalized by the inflation target of 4±2 percent.
- The CBA maintains a (de facto) fixed exchange rate to the U.S. dollar and considers it effective for controlling inflation in Azerbaijan’s undiversified economic setting, where the exchange rate is the main channel for transmission of inflationary shocks.
- Despite the peg, low financial integration due to less developed domestic financial markets has allowed a relatively independent monetary policy.
- Authorities have been considering a strategy emphasizing interest rates rather than monetary aggregates as the intermediate target, and increased exchange rate flexibility in the long run.
- CBA has overhauled its operational framework in recent years, introducing standing facility tools and redesigning open market operations instruments.

### Recent macroeconomic and financial developments (selected figures)
- Inflation dynamics:
  - Inflation rose to 14.4 percent (year-one-year) in December 2022, then declined to 3.5 percent in September 2024.
  - Core inflation declined from 14 percent in December 2022 to 2.9 percent (year-one-year) in September.
- Policy response:
  - As inflation returned to the target band and the real policy rate turned positive, the CBA reduced the policy rate by 175 basis points in the last eighteen months.
  - The CBA significantly increased reserve requirements to mop up excess liquidity from the banking sector.

### Financial sector developments
- After the 2015 manat devaluation and bailout of a large state-owned bank, financial stability risk peaked but has been declining.
- Recovery and improvements noted: capital adequacy improving, liquidity and credit risks contained, financial dollarization declining since 2017.
- Post-2019, following the dissolution of the Financial Markets Supervisory Authority, the CBA became the main regulator of banks, non-bank credit organizations, insurance companies, capital markets/investment companies, and payment systems.
- In 2022, the CBA was given an official financial stability mandate.
- Ongoing Financial Sector Assessment Program (FSAP) should be used to further strengthen the regulatory framework and support economic growth and diversification.

### Communications modernization
- The CBA has substantially extended external outreach in recent years following managerial changes; media presence increased and external stakeholders praise regular engagement.
- Monetary policy communication modernization:
  - Regular publication of Monetary Policy Review (quarterly).
  - Press releases on interest rate decisions made according to a preannounced calendar.
  - Annual policy document “The Main Directions of Monetary Policy for 2024” reiterates commitment to open and transparent communication.
  - CBA plans to expand scope of monetary policy communications and make them more effective by broadening focus and enhancing tools and channels.

_Italic: IMF Technical Assistance Report — Preface, Executive Summary, Recommendations, and Introduction (extracted content)._

### 6.   This report presents an assessment of CBA communications and proposes recommendations

### 6.   This report presents an assessment of CBA communications and proposes recommendations

### I. Institutional Communications Framework
#### A. Importance of Formalized Institutional Communications Framework
- Implementing a sound institutional framework for communications can help central banks to better achieve their objectives.
- Key elements of such a framework include:
  - Principles for effective communications: clarity, timeliness, precision, consistency, predictability, transparency, and equal access to information.
  - Communications framework covering objectives, principles, spokespersons, messages, audiences, channels, tools, and formats, and an effectiveness assessment.
  - Internal organization of the communications function: organization of the flow of information, procedures, guidelines and processes, and structure and staffing.
  - Communications products: calendar of policy decisions, press releases, press conferences, periodic monetary policy and financial stability reports, minutes of policy discussions, speeches, social media publications, and interviews.
- These elements support delivery of a compelling narrative on how the central bank is achieving its policy objectives and are beneficial in normal circumstances and in periods of stress.
- CBA communications will be assessed against these elements to guide recommendations.

#### Current Situation (Institutional Framework)
- Communications activity:
  - Numerous reports, articles, statements, and speeches published on the CBA website and various social media platforms.
  - Intensity of communications on social media platforms has been on the rise in recent years.
  - Increase in volume of communications includes publicizing events, meetings, and trips by CBA management.
- Demand for policy content:
  - Target audiences increasingly interested in more policy content, analysis, and data in social media posts.
  - Media, experts, and market participants want CBA communications “to grow its policy muscle.”
  - Stakeholders praised responsiveness and professional qualifications of CBA communications staff.
- Rules on Information Transmission to Media (RITM):
  - Provides a strong foundation; developed in 2013 and amended in 2017.
  - Described in the CBA Communications Strategy for 2024–2026 as a key foundational element.
  - Has gaps and needs updating, including reflecting relocation of the Communications Division to the Governor’s Office.
- Principles and implementation gaps:
  - Progress in communications on policy framework and objectives, policy decisions, analytical underpinnings (including models), implementation of monetary and foreign exchange (FX) tools and operations, and statistics.
  - Principles not formally established in CBA strategy documents; gaps remain in implementation.
  - Communications on the process for monetary policy decisions not yet fully consistent with predictability, precision, and equal access to information (see Paragraph 65).
  - Clarity and accessibility could be enhanced by using more accessible language and providing explanations of CBA policy and operational decisions.

#### Elements established in RITM and CBA Communications Strategy for 2024–2026
- Objectives:
  - (i) enhance the effectiveness of monetary policy by strengthening public understanding and trust;
  - (ii) help shape expectations of market participants and the broader public.
- Spokespersons:
  - Governor, Board Members, Executive Directors, Department Directors, and the press secretary of the Communications Division.
  - Areas of responsibility among spokespersons not delineated; addressing this would be useful.
  - RITM includes guidelines on public speaking and CBA spokespersons’ operations during time of crisis.
- Messages:
  - Internal processes for formulation of messages on monetary and financial stability policies exist.
  - Responsibility for articulating policy messages rests with the Management Board, with inputs from the monetary policy and financial stability departments.
  - Communications Division (CD) not currently involved in policy deliberations and formulation of policy messages.
  - CD maintains and occasionally updates a Questions and Answers document used by CBA spokespersons.
  - Procedures related to formulation and dissemination of messages, including to staff, should be included in the RITM to increase efficiency and timeliness.
- Audiences:
  - Key audiences well defined: financial market participants, media, economists and finance experts, real sector corporates, government, academia, and the public.
  - Some stakeholders find communications too technical and lacking explanations; targeting could be improved.
- Channels, tools, and formats:
  - Significant strides in developing channels and formats, active presence on social media, broadcast and online media rebroadcasting.
  - CBA website is an intermediary-free channel providing comprehensive overview of policy objectives and frameworks, decisions, monetary and FX instruments and operations, financial stability policy, and statistics.
  - Recommendation: post complete transcripts and video files of press conferences on website.
  - Content currently geared primarily to economists and analysts; posting more infographics and video materials accessible to non-technical audiences recommended.
  - No defined concept of corporate identity; publications vary in colors, fonts, and graphics.
  - CBA is working on upgrading its website and plans to launch a new version in the coming months.
- Communications products:
  - Established range: calendar of policy decisions, press releases, press conferences, periodic monetary policy and financial stability reports, speeches and interviews.
- Assessment of impact:
  - Lies with the Communications Division; assessments implemented on a semiannual basis.
  - Tools and techniques can be further strengthened; recommendations discussed in subsequent sections.

### Recommendations (Institutional Framework)
Recommendation 1: Update and expand CBA Rules on Information Transmission to Media to transform it into Communication Policy.
- Expand RITM to cover all key outreach products and procedures, including missing elements:
  - Principles for effective communications.
  - Interdepartmental processes and procedures on developing proactive messages, responses to the press, and maintenance of the Q&A file.
  - Approaches to planning and assessing the impact of communications.
  - Guidelines on using in external communications information proposed by other departments for outreach.
  - Guidance for staff on presence on social media platforms.
- Updated version approved by the CBA Management Board can become the CBA Communications Policy document.
- Explicit definition of communication principles in strategic document would help focus on implementation and use principles as an analytical tool to identify gaps.
- Distinguish strategic issues from operational issues:
  - RITM should focus on longer-term institutional and interdepartmental matters.
  - Operational issues should be managed in separate documents to preserve operational flexibility and adaptability.

- Divisional operation and management issues to be dealt with in separate documents:
  - Update terms of reference for the Communications Division to reflect relocation to the Office of the Governor and new reporting line; include goals, responsibilities, and main functions.
  - Develop divisional level guidelines or a division manual to formalize key functions: media and social media monitoring and analysis; registry of media requests and CBA’s responses; conceptual approach to visual materials and use of stock photos; other operational processes.
  - Formalizing divisional procedures aids consistency, onboarding, and identification of weaknesses and gaps.

Recommendation 2: To further refine CBA communication channels, tools, and formats.
- Simplify policy messages and establish a uniform corporate identity.
- Adopt more advanced communications techniques to reach broader audience.
- Make communications more accessible to non-technical audiences (see Figure 3 and Annex II).
- Develop and introduce a brand book to improve CBA's image.
- Communications Division to work with other departments to produce a Glossary of Technical Terms and Their Less Technical Equivalents for use in non-technical communications.

### B. Organizational Structure
#### Current Situation (Organizational Structure)
- Communications Division (CD):
  - Plays an important role in organizing and coordinating internal flow of information for external communications.
  - CD currently has six employees; Division Head position is vacant.
  - Until recently part of International Cooperation and Communications Department; subsequently relocated to the Governor’s Office.
  - Works with other departments to collate information and draft proactive communications and responses to the press.
  - Interdepartmental work processes not formalized in internal guidelines with established deadlines for departments to provide inputs.
  - Information from departments often comes in technical language not accessible to media and public, requiring redrafting and finetuning, causing time-consuming and risky delays that can undermine timeliness and allow misinformation to spread.
- Communications staff involvement in policy formulation:
  - Senior communications staff not generally present even as observers in policy deliberations and decision making.
  - CD staff not aware of upcoming decisions and cannot assess how decisions will be received or advise policymakers on communications issues.
  - Engagement of communications staff in policy deliberations common in many central banks; would improve reception of CBA messages and strengthen CD’s standing.
- Need for internal procedures:
  - Introduce internal guidance on how CD handles proposals from other departments for publicizing products or events (which products/events suitable for press release, social media post, or internal communication only).
  - Provide guidance to staff on presence on social media platforms to mitigate operational or reputational risks.

#### Recommendations (Organizational Structure)
Recommendation 3: Increase the resources of the Communications Division and upgrade its skills mix.
- Staffing and skills:
  - Increase staffing; enhance skills mix to align communications capacity with international practices.
  - Current staff: six professional staff fully occupied with media requests, press conferences, interviews, drafting speeches, media monitoring and analysis, and social media outreach.
  - Priority to add three staff positions dedicated to:
    - (i) content creation;
    - (ii) graphic design;
    - (iii) creation of video materials.
  - Increased staffing would enable closer integration with policy process, more proactive leadership of other departments on outreach, stronger policy content in communications using more accessible language, and expanded reach with more graphics and video materials.
  - Note: In the medium-term the CBA may consider further increasing both the number of staff and skills set of the Communications Division to enhance its capacity in dealing with communication challenges and contributing to policy communications.

Recommendation 4: Integrate the Communications Division more closely with other departments and decision-making processes.
- CD management and staff should be routinely included in policy discussions and participate in drafting of policy messages.
- CD should be given a “seat at the table" as a key advisor on how messages are likely to be received.
- Develop internal guidelines on cooperation between CD and policy departments in the communication process and on staff’s presence on social media platforms to streamline framework and mitigate reputational risks.

*IMF Technical Assistance Report | 13–20*

### 22. Established communications planning is a foundation of effective proactive communication

### 22. Established communications planning is a foundation of effective proactive communication

### Current situation — communications planning
- The 2024–2026 Communication Strategy and RITM do not establish a cyclical communication planning process as a necessary prerequisite for conducting the central bank’s communications.
- CBA communication activities are planned on a monthly calendar basis. The plan is developed by the CD and is based on:
  - calendars of CBA officials’ public engagements,
  - schedule for periodic analytical publications and statistics releases,
  - plans of other structural units for press releases.
- The CD only collects information about decisions made by responsible structural units and does not participate in decision-making about alignment with communication objectives or coordination between activities.
- The monthly plan:
  - does not include media engagements such as interviews or op-eds,
  - is supplemented by the 2024–2026 Communication Strategy Activity Plan, which is actually an action plan for CD to enhance the communication function rather than a strategic-level view of upcoming CBA communications.
- Internal reporting is limited to two communication reports:
  - media monitoring report (lists media publications mentioning CBA with no additional analytical input) — disseminated twice a day among CBA’s leadership and communication coordinators in each department;
  - semiannual report for implementation of the 2024–2026 Communication Strategy Activity Plan (covers actions aimed at enhancing the communication function).
- There is no periodic reporting on the volume or effectiveness of CBA’s communication activities.

### Recommendation 5 — create an ecosystem for managing communications processes
- CBA should ensure well-rounded short-, medium- and long-term communications planning.
- Elements of the proposed ecosystem:
  - Monthly plan of CBA communications:
    - Enhance the monthly plan by including expected media engagements.
    - Switch from a calendar monthly plan to a rolling monthly plan that would undergo updates at least biweekly.
    - CD should participate in discussions about the need for and timing of communication activities, not only collect inputs and disseminate the plan.
  - Monthly social media content plan:
    - Introduce an additional detailed, monthly, social media content plan to ensure a differentiated, well-coordinated approach across platforms.
  - Annual plan of CBA communications:
    - Conduct strategic-level planning (e.g., monetary policy and financial stability communication cycles and communication campaigns) on an annual basis with semiannual updates.
- Reporting to accompany plans:
  - Communication reports corresponding to each plan’s analysis period.
  - Supplement daily media monitoring reports with in-depth analytical reports on a weekly, biweekly, and/or monthly basis to report on activities planned in rolling monthly plans.
  - Report on implementation of the annual plan semiannually to inform plan updates.
  - Extend reporting period for implementation of the 2024–2026 Communication Strategy Activity Plan from semiannual to annual, given the long-term horizon.
- Formalize planning and reporting in CBA’s Communication Policy:
  - Results of communication reports should be discussed internally in CD and the Governor’s Office, and with management of other functional departments, to inform day-to-day communication decisions and plan updates.
  - Use forward-looking plans and backward-looking reports as a basis for CD’s regular check-ins with CBA leadership to ensure alignment with current policy priorities.

### Current situation — message management and content development
- Spokesperson management:
  - The Communication Strategy 2024–2026 and RITM establish a group of 28 spokespersons authorized to address the public and media on behalf of the CBA (Governor, Board members, Executive Directors as primary; directors of departments and CD’s press secretary as secondary).
  - No internal guidelines exist on how the institutional position presented in one voice should be documented and transferred to spokespersons.
  - Spokespeople do not receive regular training on external communications and media relations.
- Reactive communications system:
  - The Q&A file (managed by CD) is central: list of possible questions with suggested answers, updated occasion-based before each press conference, distributed to Governor, Deputy Governors, Executive Directors, and directors of departments.
  - CD collects media requests and provides responses to journalists; leadership and functional departments participate in developing answers.
  - The system serves well for one-voice, reactive communications but is ill suited for proactive communications because it largely depends on externally imposed media agendas.
- Proactive message absence:
  - CBA does not have a practice of determining messages for proactive communications beyond strategic-level core messages in the three-year Communication Strategy.
  - Press releases focus on facts of what happened and are not structured to convey rationale, objectives, expected outcomes, potential risks, or future policy path.
  - Event press releases miss opportunities to provide subject-specific information.
  - Social media content is derived from website publications.
- Content development ownership:
  - Development of press releases is initiated and conducted by functional departments; CD’s role is limited to proofreading, sending for publication, and disseminating to journalists.
  - Analytical reports developed entirely by functional departments with no CD involvement.
  - Social media content is initiated, developed, and published entirely by CD.
  - This fragmentation risks lack of centralized control over communication priorities and messages, affecting clarity and strength of policy signals.
- Accessibility and audience tailoring:
  - Because CD is involved late in content development, there is insufficient time to restructure texts for readability or tailor language to different audiences.
  - Result: communications are either generic or use complicated language suited for professional audiences.

### Recommendation 6 — shift from reactive to proactive communications and strengthen message management
- The CBA needs to accelerate a shift from a reactive to a proactive external communication policy, supported by an internal message management process.
- Shift requirements:
  - Move from ad-hoc formation of talking points to message formation and determination conducted in advance and on a regular basis (e.g., weekly), independent of upcoming public engagements.
  - Deliver messages proactively whenever needed to reach policy and communication objectives (e.g., in line with the predictable communication cycle for monetary policy decisions or ad-hoc for FX communications).
- Expanded internal toolkit for external messaging should include:
  - Key policy messages:
    - Messages aligned with current policy and communication objectives; answer: What key information does the central bank want to convey to its selected target audience through the specific communication activity (e.g., press release, op-ed, speech at a public event, etc.)?
  - Message boxes:
    - Messages should be supported with additional arguments, data, cases, and evidence packaged into a standard document for spokespeople and CD to use.
  - Q&A file:
    - Update not only before press conferences but also before interviews and public appearances, even if officials do not have a speaking role.
    - Maintain a universal Q&A file and customized versions for topical occasions (e.g., press briefings on monetary policy).
- Strengthen CD’s role:
  - CD should be formally responsible for the message management process: collect inputs and deliver outputs.
  - CD responsibilities: be involved in message formation early and in close cooperation with functional departments; produce and disseminate internal materials for reactive and proactive communications; oversee clarity and consistency across publications; be responsible for content development including press releases; customize messages and content for different audiences.
- Institutionalize in Communication Policy:
  - Define the internal toolkit, the roles of CD, structural units, and leadership in message formation and dissemination, update frequency, and list of internal recipients.
  - Require all spokespeople to follow messages, message boxes, and talking points in external communication.
  - Regular training on external communications for CBA management and senior staff to enhance spokesperson management.

### Current situation — monitoring and assessment of communications effectiveness
- Media monitoring:
  - CD manually monitors approximately 50 local and 10 international media sources daily.
  - Monitoring results are packaged into a media monitoring report twice a day and enable CD, with relevant departments, to track and address misconceptions quickly.
- Analytical gaps:
  - Continuous monitoring data are not analyzed to derive conclusions that could inform decision making for communications generally and monetary policy communications specifically.
  - Limits CBA’s ability to calibrate messages and plans or to amplify messages on additional channels in a timely manner.
- Ignored data sources:
  - Available raw data (database of media requests, CBA’s website analytics, social media analytics, and household and expert surveys on inflation expectations) are not sufficiently researched or considered in communications decision-making.

### Recommendation 7 — establish framework for regular assessment of communications effectiveness
- Expand data collection:
  - Increase the number of monitored media outlets and start monitoring social media.
  - Given expected increase in monitored publications, shift from manual monitoring to specialized software (procure access from a third-party vendor) or outsource monitoring to a specialized contractor.
  - Maintain a database tracking numbers of CBA’s communication activities and statistics of owned channels (website and social media pages).
- Supplement monitoring with periodic surveys:
  - Conduct surveys to assess:
    - level of trust in the central bank,
    - awareness of its mandate,
    - awareness of monetary policy objective and inflation target,
    - confidence in the central bank’s ability to reach its objectives.
  - To evaluate effectiveness of monetary policy communication over time, survey a wider range of stakeholders on their inflation expectations, including firms.

*Source: IMF Technical Assistance Report — Central Bank of the Republic of Azerbaijan (excerpts).*

### 45. With an increase in the volume of observed data, the CBA should start assessing the

### tarea2025013-print-pdf - 45. With an increase in the volume of observed data, the CBA should start assessing the

### Assessing effectiveness of central bank communications
- With an increase in the volume of observed data, the CBA should start assessing the effectiveness of the central bank communications across a wide spectrum of qualitative and quantitative indicators (see Annex III).
- The timeframe of the analysis should be tied to the planning and reporting periods so that its results feed into:
  - in-depth analytical reports;
  - day-to-day communication activities; and
  - the development of communication plans and the communication strategy.

### Internal capacity and cross-departmental cooperation
- CBA should enhance the internal capacity of CD staff through:
  - capacity-building training; and
  - cross-departmental rotation.
- CD should cooperate closely with:
  - Research Department;
  - Statistics Department; and
  - Monetary Policy Department (MPD)
  on:
  - studying the impact of the level of trust in the central bank and its monetary policy communications on inflation expectations;
  - testing the central bank’s publications for readability using computational linguistics.

### Crisis communications — current situation and good practices
- Context and principles:
  - Numerous countries experience crises stemming from fiscal, financial sector, or balance of payments vulnerabilities, or combinations thereof.
  - Economic policies can reduce but not eliminate crisis risk.
  - Knowing what to say when a crisis strikes can be as important as knowing what to do.
  - Crises differ in origin and unfolding; there are no silver bullets on communications.
  - General good practices and key principles for crisis communications have emerged (see Annex IV).
  - More effective communications, based on an ex-ante protocol on who speaks when and about what, can reduce the severity of the crisis and speed recovery.
- Existing CBA protocol (Rules of Information Transmission to Media):
  - Lists possible early warning indicators of a crisis.
  - Describes conditions for forming a crisis communications group including all spokespersons (and, if necessary, some CBA staff).
  - Requires the group to review the crisis communications plan and scenarios, and assess risks including public perceptions.
  - If warranted, a 24/7 hot line and a special operational mode for the CBA website will be activated.
  - The crisis communications group will conduct a postcrisis assessment after the crisis is over.
- Recommended preparedness measures:
  - Hold a crisis simulation exercise to test the protocol, develop the group’s ability to “think on their feet,” and speak with one voice.
  - Use lessons learned from simulations and postexercise analysis to fine-tune the protocol.
  - Develop crisis communication plans for “known unknown” crises covering baseline and likely alternative scenarios:
    - For each scenario include messages and communication activities for different channels.
    - Distribute speaking roles among central bank spokespeople.
  - Employ communications at the precrisis stage to mitigate foreseeable crises with proactive messaging on high-probability risks, triggers, and the central bank’s toolkit.
  - As crisis unfolds, evolve messaging from toolkit description to pending measures to measures taken and their results (see Annex IV).

### Recommendation 8 (crisis simulation)
- The CBA would benefit from holding a crisis simulation exercise.
  - It would enable the CBA to be better prepared for unexpected adverse developments.
  - It would test its crisis communications protocol.
  - It would help fine-tune crisis communications procedures and plans.

### Monetary policy communication — current situation
- Role of communication:
  - Effective communication is crucial for central banks to implement monetary policy and build public trust.
  - Central banks articulate objectives, strategy, decisions on policy interest rates, expected developments, and constraints/risks.
  - Clear, timely communication enhances transparency, shapes expectations, builds credibility, aids crisis management, engages stakeholders, ensures accountability, and educates.
- CBA progress and challenges:
  - Since the recent start of monetary policy modernization, CBA has been revising and improving communication practices.
  - Transition to IT in the medium-term will necessitate further improvement in monetary communication practices.
  - Stakeholders positively assess evolution and effectiveness but call for simplification of information.
  - Most available information is descriptive and backward-looking, used for reporting rather than meaningful guidance.
  - Official CBA website is the primary communication tool.
- Strategic and reporting documents:
  - Two high-level documents embed monetary policy strategy:
    - “Socio-economic development Strategy of the Republic of Azerbaijan for 2022–2026” defines numerical inflation target for the CBA.
    - “Main Directions of Monetary policy” is produced annually and conveyed to the Office of the President and Parliament; it outlines goals, strategy, policy tools, risks, and includes a calendar of policy decision announcements regarding the refinancing rate for the upcoming calendar year.
  - Recommendation: follow common practice of publishing the policy announcement calendar as a separate document/tab on the official webpage.
- Reporting publications and practices:
  - Annual Report and Report on the Accomplishment of the Main Goals and Functions are prepared annually per the Central Bank Law; they provide accountability on prior-year achievements.
    - Recommendation: the Annual Report would benefit from (i) streamlining content and (ii) incorporating visual information, including schemes, graphs, and tables (see Annex V).
  - Monetary Policy Review (MPR):
    - Produced quarterly; preparation procedures are not synchronized with policy rate decision cycle.
    - Contains broad, mostly descriptive information on global and domestic developments and monetary policy measures.
    - CBA has begun improving MPR to be more forward-looking; key macroeconomic forecasts have been recently disclosed in the MPR for the first time.
    - Operational framework described in a standalone “Manual on Operational Framework.”
  - Press releases:
    - Issued after each Board meeting on monetary policy.
    - Quality has substantially improved: updated, shortened, structured, succinct key messages.
    - Prepared by MPD; English version produced in-house and posted simultaneously.
    - CD is not involved in preparing press release content.
    - Minutes of Board policy meetings are not published.
  - Press conferences:
    - Four times a year following Board decisions; Governor delivers speech and Q&A session.
    - CBA aims to center on policy rate issues but media often deviate.
    - Considered improvements: post Governor’s speeches on website; incorporate link for press conferences on website; provide simultaneous translation or English subtitles to expand audience.
- FX-related communication:
  - “Main Directions of Monetary Policy” states exchange rate is the primary operating target of monetary policy.
  - Key FX auction parameters are well known; State Oil Fund of Azerbaijan projects annual FX volumes and distributes them evenly within a year.
  - Auctions carried out at fixed date/time on Bloomberg Auction Platform and communicated one hour before; post-trading information disclosed right after each auction via short press release including volumes and average price (see Figure 10).
  - Information on CBA FX interventions is less openly available: intervention dates known in advance, volumes market determined, interbank FX rates may differ marginally from official fixed rate; intervention volumes and FX reserves figures are published with some delay.
  - Recommendation: streamline FX communication practices and communicate FX issues through the prism of price stability given high public interest.
    - Improve transparency on: (i) exchange rate policy frameworks, objectives, principles, instruments, and implementation; and (ii) outcomes and reporting to stakeholders to facilitate accountability.
    - Good practice: include detailed information on exchange rate developments, FX market, and functioning in the MPR.
    - Consider publishing timely information on FX interventions and reserves.
- Stakeholder feedback:
  - External stakeholders note substantial improvements in monetary policy transparency and communication by CBA management.
  - Gaps remain: lack of regular analytical products on inflation, banking system, monetary policy, and interbank market developments.
  - MPR remains mostly descriptive and backward-looking despite ongoing reshaping efforts.
  - Customizing monetary policy products to different audiences can simplify messages and improve understanding.
- Clarity vs transparency:
  - While transparency has improved, stakeholders demand greater clarity through simplified explanations of how the CBA expects to reach its objective.
  - Achieving clarity requires institutionalizing a message management process at the CBA (see Paragraph 37), internal understanding of transmission mechanisms, and educating target groups.
  - Current challenges relate to transitioning from quantity-based instruments to price-based instruments.
- Tiered communication:
  - Some tiered communication elements exist (e.g., amplifying messages across social media).
  - Adopting a multitiered framework can enhance transparency, build trust, and tailor updates to diverse stakeholders.
  - Tiered strategy is especially effective during crises to ensure timely, accurate information reaches all stakeholders.

### Recommendations on monetary policy communication
- Recommendation 9: Elevate the Monetary Policy Review to the role of flagship publication.
  - MPR should become the main vehicle for communicating monetary policy.
  - MPR should provide analysis of recent developments and a comprehensive vision of future economic trends, explaining the reaction function of monetary policy.
  - Incorporate macroeconomic forecasts and scenarios, monetary analysis, and risk assessment.
  - Each MPR should begin by reiterating the policy objective of the CBA, followed by an “Executive or Non-technical Summary,” which can be drafted with the CD.
  - Include a section on previous monetary policy decisions to show how the situation has changed over time (relevant if refinancing rate is changed at intermittent Board meetings).
  - CBA is preparing analysis and forecasts within its Forecasting and Policy Analysis System (FPAS) framework which are quarterly presented to the Monetary Policy and Financial Stability Committee (MPFSC); incorporating FPAS materials into the MPR is a recommended starting point.
  - Publication logistics:
    - The MPR as flagship should be properly communicated to target audience.
    - Professional market participants and experts are key MPR consumers.
    - Publication should follow announced calendar and be placed on the website at a fixed time, following principles of predictability, precision, and equal access.
    - New role implies clear delineation between products that carry key policy messages and those that provide technical background.
- Recommendation 10: Press releases should be considered as the main tool for immediate communication of policy decisions.
  - Press release should be the first source of information on monetary policy decisions.
  - CBA already publishes press releases simultaneously in all languages and announces the calendar at year-end.
  - Predictability in time and place of release is needed; press release should be posted on official website first on scheduled day/time.
  - Social media should amplify announcements to a broader audience.
  - Update the calendar of policy announcements well in advance in the designated webpage tab to include:
    - dates of policy announcements;
    - times of Board meetings and press conferences; and
    - dates of publication of the MPR in each language.
  - Press release content:
    - Should be more policy focused and forward looking, yet brief.
    - Titles should reflect actual decisions rather than corridor parameters (example: a press release titled “On interest rate corridor parameters” would be more informative as “The Central Bank of the Republic of Azerbaijan keeps the policy rate at 7.25 percent.”).
    - Continue refining press releases to focus on reasons for the decision, economic outlook, and risks relevant to future policy settings (see Annex VI).
- Recommendation 11: Following best practices, the CBA should clearly communicate current monetary policy decision-making arrangement.

*IMF Technical Assistance Report | excerpt*

### 73. The CBA discloses a substantial amount of information on the CBA legislation, governance,

### Communication and Transparency of the CBA (sections 73–87)

### Disclosure, legislation, governance, and website
- The CBA "discloses a substantial amount of information on the CBA legislation, governance, mission, principles, and organizational structure."
- Recommended content to be easily available on the CBA webpage:
  - Clear overview of the organizational structure and allocation of responsibilities to decision-making bodies (policy making, day-to-day management, internal oversight, composition).
  - Links to relevant central bank legislation or charters/by-laws.
- Annex I checklist for an effective central bank website highlights usability criteria including:
  - Ease of finding key information (inflation target, policy rate, calendar of future policy meetings, inflation report).
  - Focus of information, clarity and readability, tiering of information, attribution of information, accessibility of historical information, use of graphics/videos/podcasts, public education section, and mobile-friendly design.

### Analytical publications, statistics, and outreach
- Current situation:
  - "An abundance of statistical information is available on the CBA webpage. However, there is a lack of timely analytical publications on CBA key areas."
  - The Monetary Policy Review (MPR) publication "follows its own procedures and publication cycle" and is not aligned with the policy rate cycle.
- Recommendations and specific proposals:
  - Recommendation 12: "Produce analytical notes/chartbooks about recent developments in inflation, banking and non-banking financial sectors."
  - Recommendation 13: "Expand outreach on monetary policy communications."
  - Produce a monthly analysis covering developments in inflation, bank loans and deposits, interbank trading, etc., to support stakeholder understanding and to communicate policy rationale after Board meetings.
  - Upgrade MPR to flagship status by aligning its drafting process with four Board Meetings; this alignment "can be introduced starting next year."

### Communication cycle of monetary policy — current arrangements
- Decision-making frequency and format:
  - The CBA Management Board decides on the key policy rate "eight times a year, four of which are followed by press conferences."
  - Decision-making arrangement uses a "five-week cycle."
  - The last week of the cycle is when the Board, based on the recommendation of (advisory) MPFSC, decides on the rate and makes an announcement; that week is a "silence period" with no relevant communication allowed before the decision is announced.
  - The announcement day is scheduled in advance but can vary within the week (typically from Wednesday to Friday).
- Timing and timeliness issues:
  - "The Management Board decision is made at least two days before it is announced."
  - No precise, established time for press release publication; "lately it has been scheduled at 11:00 AM."
  - Best practice stated: announcement should come within a few hours (or the next morning at the latest), at a fixed time.
- Internal communication:
  - Monetary policy communication processes are "fragmented, especially in terms of internal communication arrangements."
  - MPD leads monetary policy communication and handles content in all languages; CD's role is limited to distribution and posting.
  - A newly established Monetary Policy Communication Division within MPD could address the issue.
- Recommendations:
  - Recommendation 14: "The CBA should intensify the use of tiered communication practices."
  - Recommendation 15: "Streamline the monetary policy communication cycle."

### Recommended communication cycle and processes
- Core design principles:
  - Build the monetary policy communication cycle around the MPR publication and establish a fixed-time routine.
  - Position quarterly MPR as the core document for the monetary policy decision-making cycle.
- Sequencing and timing (recommended):
  - Management Board interest rate-setting meetings should be fixed for a certain day of the week (note: "normally, the central banks schedule decision-making meetings for Tuesdays/Wednesdays/Thursdays").
  - The same or the following day at the preset time the press release should be published in two languages.
  - Simultaneously (or with no more than one hour delay), schedule the press conference of the Governor.
  - One or two weeks later, publish the MPR, if possible, in two languages.
  - Once the MPR is published, hold meetings with the expert community, foreign analysts, commercial bank treasurers, etc., to convey key messages and explain the decision in greater detail.
- Drafting process enhancements:
  - One week prior to the Board meeting, MPD jointly with CD should form three or more key monetary policy messages, draft the press release and speech for the Governor, and include these in the package for the Board’s consideration and approval.
  - Internal coordination between policy and communication units is important to deliver "one-voice messages" and tier messages for different target groups.
  - Participation of the CD Head in the Board meeting is recommended; attendance at decision-making meetings should be limited to Board members and a few authorized staff members to preserve confidentiality.
- Press conferences and minutes:
  - The CBA "might consider holding press conferences after each Board meeting." Shorter-format press briefings are acceptable when new forecasts are not available.
  - Publishing minutes of interest rate-setting meetings is identified as best practice in inflation-targeting central banks; practices vary by level of detail, attribution, voting outcomes, and time delay. Timely release of discussions and range of views helps experts and signals uncertainty around decisions.

### Communication techniques, audience segmentation, and evaluation
- Advanced communication techniques (Annex II):
  - Use more accessible language without altering meaning; deliver tiered and relatable messages; apply behavioral insights (psychology, cognitive and social science); perform audience segmentation to tailor messages by subgroups.
  - Tiering by content: provide core messages at two or three levels of technicality so recipients choose the most meaningful version.
  - Tiering by channels: adapt the same message for print, television, radio, video, online, and social media (channel declination).
- Methods and indicators for evaluating effectiveness (Annex III) — selected measurable elements:
  - Overall number of communication activities (publications on owned, free, and paid channels; responses to media inquiries; speakers’ engagements).
  - Breakdown: proactive vs. reactive activities; by communication product (press releases, speeches, social media posts).
  - Website metrics: total number of users and new users and their growth rates; number of visits and their timing around policy decisions; breakdown by topic; sources of traffic; most-read publications by topic.
  - Social media metrics: followers and growth rates; views/impressions and interactions; click-through rates for specific publications.
  - Media and social media monitoring: volume of mentions; share by media channels; share of publications generated by the central bank; audience outreach (views); topic/narrative analysis; sentiment analysis (positive/negative/neutral); penetration of key messages in priority media (signal-to-noise ratio).
  - Surveys and sociological tools: inflation expectations (households, experts and bank analysts, corporations); levels of trust and confidence in the central bank; public knowledge and awareness of the central bank’s mandate, mission, objectives, and tools.

### Follow-up, implementation, and broader conclusions
- Follow-up technical assistance and oversight:
  - "Follow-up missions would allow IMF staff not only to support CBA with the implementation of these recommendations, but also to closely review other key aspects of central bank communication."
  - Additional technical assistance priorities identified:
    - Further work on measuring the effectiveness of CBA policy communications.
    - Dedicated advice on financial stability communications (CBA's Financial Stability Review is biannual).
    - Consideration in the next few years of requesting an IMF Central Bank Transparency review to enhance accountability and external dialogue.
- Strategic conclusion:
  - "Going forward, the impressive progress in communication has to be accompanied by consistent policy actions to ensure that the CBA’s credibility continues to grow."
  - Transition to inflation targeting ("IT") is "a complex process, which could take many years to complete."
  - Credible commitment to appropriate policy action—"by saying what it does and by doing what it says"—is essential for bolstering credibility and enhancing communication’s role in fulfilling the central bank’s mandate.

*IMF Technical Assistance Report | sections 73–87*

### Annex IV. Key Principles of Crisis

### Annex IV. Key Principles of Crisis Communications

### Clarity of objectives
- Main objective when there is a high risk of a systemic financial crisis: transmit confidence to prevent or end creditor runs on financial institutions and markets.
- Communication strategy must be part of a comprehensive policy package to address underlying problems, not just a delaying tactic.

### What to communicate
- Who is affected and what is being done:
  - Key messages must describe what the issue is, who it affects, and what is being done about it.
  - Policy responses should be linked back to market participants’ basic concerns: Is my money safe? Can I conduct normal banking business? Will I have access to funds?
  - Do not leave key questions unanswered.
- Deliver news in clear, definitive, but not alarming terms:
  - If depositors or other creditors must bear losses, communicate this clearly using plain language, explain why it is necessary, and do not change the message (barring major new developments).
- Communicating problems without solutions will increase uncertainty:
  - Unaddressed problems increase incentives for creditors to run on financial institutions.
- Do not overpromise:
  - Address problems that are clearly identified without saying or implying that there will be no more bad news if uncertainty remains.
  - Example: Saying that no more banks will fail while conditions remain turbulent may lead to a loss of credibility if a small, non-systemic failure then occurs.

### Speak with one voice
- Financial sector authorities must communicate clearly and consistently, without contradiction or inconsistent messaging between different public agencies.

### Be ready for “media wars”
- Affected stakeholders may challenge authorities’ representation of events, policies, or policymakers as individuals; prepare a strong and unified response against such attacks.

### Coordinate
- Effective coordination across government and financial agencies is required for a comprehensive policy package and consistent communication by one or a few spokespersons.
- Coordination requires flexibility and capacity to respond quickly to emerging developments.

### Prepare well
- While some decisions must be made “in the moment” during a crisis, many decisions, materials, and processes can and should be prepared in advance.

*Annex IV. Key Principles of Crisis Communications — IMF Technical Assistance Report*

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_Source: https://www.imf.org/-/media/files/publications/tar/2025/english/tarea2025013-print-pdf.pdf_