{
  "title": "Monetary Policy Communication and Financial Markets in India",
  "publication": "IMF Working Papers, October 28, 2022",
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  "summary": "Forward-looking monetary policy communication has become a key element of flexible inflation-targeting regimes across advanced and emerging market economies.",
  "sections": [
    {
      "heading": "Summary and context",
      "content": "- Forward-looking monetary policy communication is a key element of flexible inflation-targeting regimes across advanced and emerging market economies.\n- The Reserve Bank of India’s implementation of a flexible inflation targeting framework since 2016 has been supported by a broad set of communication tools.\n- Recent policy innovations examined include forward guidance on policy rates and asset purchases, which have increased the predictability of monetary policy.\n- A review of innovations during the initial waves of the pandemic suggests forward guidance likely played a key role in moderating uncertainty and supporting some asset prices.\n- The analysis finds the relationship between monetary policy surprises and yields for government and corporate securities across all maturities are positive and statistically significant.\n- The results support an important role for monetary policy communication in guiding market expectations about the monetary policy stance, including the likely path of policy interest rates."
    },
    {
      "heading": "Key findings (enumerated)",
      "content": "- RBI’s flexible inflation-targeting framework implemented since 2016 is supported by broad communication tools.\n- Policy innovations studied: forward guidance on policy rates; asset purchases.\n- Forward guidance likely moderated uncertainty during the initial pandemic waves and supported some asset prices.\n- Monetary policy surprises have a positive and statistically significant relationship with yields for government and corporate securities across all maturities.\n- Monetary policy communication is important for shaping market expectations about the policy interest rate path."
    },
    {
      "heading": "Subject areas and keywords",
      "content": "- Subject: Asset prices, Central bank policy rate, Financial services, Inflation, Inflation targeting, Monetary policy, Monetary policy communication, Prices\n- Keywords: Asset prices, asset purchase, Central bank policy rate, communication, forward guidance, Global, India, Inflation, inflation targeting, inflation targeting framework, inflation-targeting regime, Monetary policy, monetary policy announcement, Monetary policy communication, monetary policy surprise\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2022/10/28/monetary-policy-communication-and-financial-markets-in-india-525085"
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    "Authors: Faisal Ahmed, Mahir Binici, Jarkko Turunen",
    "Published: October 28, 2022",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9798400224430.001",
    "Forward-looking monetary policy communication is a key element of flexible inflation-targeting regimes across advanced and emerging market economies.",
    "The Reserve Bank of India’s implementation of a flexible inflation targeting framework since 2016 has been supported by a broad set of communication tools.",
    "Recent policy innovations examined include forward guidance on policy rates and asset purchases, which have increased the predictability of monetary policy.",
    "A review of innovations during the initial waves of the pandemic suggests forward guidance likely played a key role in moderating uncertainty and supporting some asset prices.",
    "The analysis finds the relationship between monetary policy surprises and yields for government and corporate securities across all maturities are positive and statistically significant.",
    "The results support an important role for monetary policy communication in guiding market expectations about the monetary policy stance, including the likely path of policy interest rates.",
    "RBI’s flexible inflation-targeting framework implemented since 2016 is supported by broad communication tools.",
    "Policy innovations studied: forward guidance on policy rates; asset purchases.",
    "Forward guidance likely moderated uncertainty during the initial pandemic waves and supported some asset prices.",
    "Monetary policy surprises have a positive and statistically significant relationship with yields for government and corporate securities across all maturities.",
    "Monetary policy communication is important for shaping market expectations about the policy interest rate path.",
    "Subject: Asset prices, Central bank policy rate, Financial services, Inflation, Inflation targeting, Monetary policy, Monetary policy communication, Prices",
    "Keywords: Asset prices, asset purchase, Central bank policy rate, communication, forward guidance, Global, India, Inflation, inflation targeting, inflation targeting framework, inflation-targeting regime, Monetary policy, monetary policy announcement, Monetary policy communication, monetary policy surprise",
    "**Working Paper**"
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