RBI can do with some glasnost

Abstract

It should open up and share more information through seminars and workshops. Also, a Beige Book might be in order. In recent years, especially after 2008, communication is considered an important component of monetary policy. Theoretically, communication helps in making central banks transparent and contribute to their reputation and accountability. Also, communication plays an important role in managing the expectations of economic agents.

There is empirical evidence to show that better communication policy reduces market uncertainty. Therefore, central banks aim to communicate better with markets to achieve policy effectiveness and credibility, accountability, and reinforce public support for independence. In times of uncertainty, communication policy assumes added responsibility in view of abundant online information. The hallmark of good communication is clarity in analysis, forecast and prescription. In fact, Mario Draghi, president of the ECB, considers communication a monetary policy tool in itself. Read more at: https://www.thehindubusinessline.com/opinion/rbi-can-do-with-some-glasnost/article10030422.ece