Authors: Tetiana Yukhymenko, Oleh Sorochan
Abstract: This study explores the impact of central bank communications on a range of macrofinancial indicators. Specifically, we examine whether information posted on the National Bank of Ukraine (NBU) website influences foreign exchange (FX) markets and the inflation expectations of experts. Our main results suggest that the NBU’s statements and press releases on monetary policy issues do indeed matter. For instance, we find that exchange rate movements and volatility are negatively correlated with the volumes of publications of the NBU on its official website. However, this effect is noticeably larger for volatility than for exchange rate changes. The impact of communication on FX developments is strongest a week after a news release, and it persists further. Furthermore, the inflation expectations of financial experts, though indifferent to NBU updates overall, turn out to be sensitive to monetary policy announcements. The latter reduces the level of expectations and interest rate movement.
Cite as: Yukhymenko, T., Sorochan, O. (2024). Impact of the Central Bank’s Communication on Macrofinancial Outcomes. NBU Working Papers, 1/2024. Kyiv: National Bank of Ukraine.