The evolution of central bank communication as experienced by the South Africa Reserve Bank. Issue 2 (4th May 2021)

• Record Type: Journal Article
• Authors: du Rand, Gideon; Erasmus, Ruan; Hollander, Hylton; Reid, Monique; van Lill, Dawie
• Is Part Of: Economic history of developing regions. Volume 36:Issue 2(2021)
• Page Start: 282
• Page End: 312
• Publication Date: 2021-05-04
• Subjects: Communication -- text-mining -- central bank -- monetary policy -- inflation targeting; E52 -- E58 -- N17 -- N10; Developing countries -- Economic conditions -- Periodicals; Africa, Southern -- Economic conditions -- Periodicals; Economic history -- Periodicals; Economic history; Africa, Southern; Periodicals; Electronic journals; 330.091724
• DOI: 10.1080/20780389.2021.1925106
• Languages: English
• ISSNs: 2078-0389

Abstract

ABSTRACT: Communication has evolved into a cornerstone of central bank design and policy implementation. The South African Reserve Bank has been proactive in this regard as well – most notably with the adoption of inflation targeting in 2001. Using novel text-mining techniques, we evaluate the communication of the SARB, as presented via public speeches and monetary policy committee (MPC) statements, in the context of historical developments from 1994 to 2020. Our analysis focuses on the volume, complexity, scope, and sentiment of communication. We conclude that MPC statements are consistently and narrowly focused on the mandate, whereas speeches capture more detail about how the thinking of SARB policy makers evolves over time. In both cases, communication serves as a channel to reduce uncertainty and build credibility in the public domain.