Will central bank transparency reduce inflation in emerging economies?

This paper gauges the association between central bank transparency (CT) and the inflation rate in 19 emerging countries. The estimations are conducted on an unbalanced panel dataset from 1992 to 2021 using the feasible GLS method. The results show that greater overall CT lowers inflation. The same conclusion applied to all subcomponents of CT, except for political transparency. The robustness analyses mostly confirm the findings. These results suggest that a central bank could remain secretive in the policy weightage between inflation and output stabilization or monetary policy motives to maintain low inflation while being more transparent on other transparency components.