New evidence from the monetary policy communication and inflation expectations nexus in Africa

被引:3
作者
Odu, Ada Tony [1 ]
Aminu, Umaru [1 ]
Ado, Nuhu [1 ]
机构
[1] Cent Bank Nigeria, Res Dept, Abuja, Nigeria
关键词
Inflation expectations; Monetary policy communication; Tone; Sentiment; Readability; CENTRAL BANK COMMUNICATION; EXCHANGE-RATE;
D O I
10.1016/j.sciaf.2023.e01993
中图分类号
O [数理科学和化学]; P [天文学、地球科学]; Q [生物科学]; N [自然科学总论];
学科分类号
07 ; 0710 ; 09 ;
摘要
Motivated by the dearth of evidence, we examine the impact of monetary policy communication on inflation expectations in Africa. Employing text-mining techniques to analyse the monetary policy statements of six African central banks, we compute a novel index of monetary policy communication (MPCI) using the extracted word counts, readability, sentiment and tone indicators. We provide new evidence of a positive and statistically significant impact of sentiments, tone and the MPCI on inflation expectations in Africa. Our results also reveal a rising influence of sentiments in anchoring expectations during the COVID-19 pandemic era. Our results are robust to alternative measures of inflation expectation and to global economic uncertainty. We recommend concise and lucid policy statements alongside statements with tone and policy decision consistency for anchoring inflation expectations. Furthermore, investors should carefully analyse and respond to signals from central bank communication, incorporating these insights into their investment strategies and risk management practices.
引用
收藏
页数:11
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