The importance of communication in macroeconomic policy management

For a number of reasons, a central bank needs to continually interact and disseminate information to stakeholders. Such interactions and communication clarify the Bank’s role and, therefore, reinforces the effectiveness with which it discharges its mandate of ensuring price stability, sound financial and well-functioning payments systems and, more broadly, financial stability.

Therefore, the subject of this Brief is ‘The Importance of Communication in Macroeconomic Policy Management.’ For this purpose, it is important to distil macroeconomic policy into three distinct elements, namely fiscal policy, monetary policy and exchange rate policy; and for convenience add financial sector policies in order to complete the interactive and inherent relationships involved. Individually and together, these policies are intended to affect the behaviour of economic agents, which is, their response in terms of the supply and demand factors of economic activity.