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

Author/Editor:

Michael McMahon ; Alfred Schipke ; Xiang Li

Publication Date:

November 16, 2018

Electronic Access:

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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.

Series:

Working Paper No. 18/244

Subject:

English

Publication Date:

November 16, 2018

ISBN/ISSN:

9781484385647/1018-5941

Stock No:

WPIEA2018244

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

32

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