|Title:||The communication effect of the central bank of Taiwan on interest rates and exchange rates||Authors:||HUNG-JEN WANG
Kang, Chi Hung
|Keywords:||Central bank | Communication policy | Transparency||Issue Date:||1-Jan-2017||Journal Volume:||45||Journal Issue:||3||Source:||Taiwan Economic Review||Abstract:||
© 2018 National Taiwan University. All rights reserved. This paper studies the communication policy of the central bank of Taiwan. We analyze the issue by categorizing the central bank's communication efforts into "news releases after the Board of Governors' meetings" and "talks of central bank's officials in the media." We further decompose the communications into three sub-categories: monetary policy, exchange rate policy, and economic perspectives, to estimate their respective effects on interest rates and exchange rates. IF communication policy is effective in terms of revealing new information to the market, then we would expect to observe significant changes in interest rates or exchange rates on the day the news is released or one day after, and the changes should be consistent with what policy makers had intended. Data show that the central bank of Taiwan seldom clearly indicates the potential movement of exchange rates in news releases after the Board of Governors' meetings. Nevertheless, media reports suggest that officials frequently communicate with the market on exchange rate related issues. We also find that communications about exchange rates do not significantly affect the movement of the exchange rates, while most communications concerning monetary policy significantly affect various market interest rates.
|Appears in Collections:||經濟學系|
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