Transparence des Banques Centrales et efficacité de la politique monétaire: quelles implications pour la Banque des Etats de l’Afrique Centrale ?

Central Bank's Transparency and effectiveness of monetary policy: what implications for the Bank of Central African States?

Francis Ngomba Bodi, Dessy-Karl Tadadjeu Wemba and Soulemanou Soulemanou

MPRA Paper from University Library of Munich, Germany

Abstract: For a long time characterized by secrecy, Central Banks nowadays give a strategic priority to the communication of their monetary policy. This recent trend towards increased transparency leads us to reflect on its implications for the effectiveness of monetary policy. Arguments on the expected benefits of this practice are provided by the economic literature, and are linked to a recent desire for transparency and accountability at the level of Central Banks. In line with global best practices, the Bank of Central African States (BEAC) has evolved in recent years towards greater transparency and credibility of its policy by improving the way it communicates with the public. Despite this notable improvement, there is still very little empirical evidence on the link between Central Bank transparency and monetary policy outcomes in Sub-Saharan Africa (SSA). Therefore, the overall objective of this paper is to analyze the BEAC’s communication strategy within the Central African Economic and Monetary Community (CEMAC) between 2010 and 2020. Specifically, the aim is to determine the most recent level and regime of transparency of the BEAC, and subsequently to empirically test the effect of Central Bank transparency on price stability in SSA. By combining both descriptive and empirical techniques, interviews and questionnaires, this study contributes to a better understanding of the political economy of Central Banks, and particularly that of the BEAC. The results show a slight intensification and improvement (qualitative and quantitative) in BEAC communication. They also show a mixed impact of transparency on the effectiveness of monetary policy (price stability), and recommend the need to continue to improve the communication strategy of Central Banks in SSA.

Keywords: communication; Central Bank transparency; monetary policy effectiveness; Sub-Saharan Africa; BEAC (search for similar items in EconPapers)
JEL-codes: E31 E42 E58 (search for similar items in EconPapers)
Date: 2020
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