China’s Monetary Policy Communication: Frameworks, Impact, and Recommendations
IMF Working Papers, November 16, 2018
Source details
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- China’s Monetary Policy Communication: Frameworks, Impact, and Recommendations
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Bibliographic details
- Authors: Michael McMahon, Alfred Schipke, Xiang Li
- Published: November 16, 2018
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781484385647.001
Overview and purpose
- 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.
- The paper discusses China’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 significant progress but that PBC communication is still evolving toward the level of other major economies.
- The paper recommends both medium-term policy reforms and reforms that can be adopted quickly.
Authors and publication metadata
- Authors: Michael McMahon, Alfred Schipke, Xiang Li
- Publication date: November 16, 2018
- Series: IMF Working Papers
- Working Paper No.: 2018/244
- Volume: 2018
- Pages: 32
- DOI: https://doi.org/10.5089/9781484385647.001
- Stock No.: WPIEA2018244
- ISBN: 9781484385647
- ISSN: 1018-5941
Key subjects and keywords
- Subjects: 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
Empirical findings (as reported)
- The paper empirically analyzes the impact on financial markets of the PBC’s main communication channels, including a novel communication channel.
- The results indicate:
- Significant progress in PBC communication to date.
- PBC communication remains in evolution and has not yet reached the level of communication of other major economies.
Policy recommendations
- The paper recommends:
- Medium-term policy reforms to further develop PBC communication frameworks.
- Reforms that can be adopted quickly to improve transparency and signaling in the near term.
Access and formats
- The paper is available on the IMF eLibrary in multiple formats and is also available in 中文.
- The landing page provides options to Download PDF, Order a Print Copy, Create Citation, and Share.
IMF Working Paper No. 2018/244 (Michael McMahon, Alfred Schipke, Xiang Li), November 16, 2018.
Content in this bundle
- Box 1. Communication Terminology