How we communicate our decisions
Economic agents’ expectations have a considerable impact on the economy in general and on inflation in particular. Therefore, the Bank of Russia provides detailed explanations regarding inflation movements and the reasons behind them, as well as how the regulator influences this process. Information transparency is crucial to enhance the understanding of and confidence in the Bank of Russia’s policy, as well as to make its actions more predictable for economic agents. This contributes to the efficiency of monetary policy.
The Bank of Russia’ monetary policy communication is to be detailed and up to date. This applies to clarifying the reasoning behind monetary policy decisions and their expected effects, the Bank of Russia’s view of the current economic situation and its forecast.
The Bank of Russia pursues its information policy taking into account the specifics of the target audiences, that is, it presents the information in such a manner as to make it clear and helpful to users. This implies that the content, form and communication channels of this information are customised to various categories of users, their interests and requirements.
The principal strategic document related to monetary policy issues is the Monetary Policy Guidelines. In this document, the Bank of Russia each year describes the goals of monetary policy and approaches to its implementation as well as medium-term macroeconomic scenarios. The Bank of Russia Annual Report summarises the results of monetary policy implementation over the year. Current monetary policy decisions are described in press releases on the key rate, Summary of the Key Rate Discussion and Commentary on the Bank of Russia’s Medium-term Forecast (Monetary Policy Report until November 2023), as well as statements by the Bank of Russia Governor in follow-up of Board of Directors meeting. In addition, representatives of the Bank of Russia hold regular meetings with representatives of state authorities, journalists, analysts and investors, give interviews to mass media, as well as speak at conferences, fora and congresses. The Bank of Russia present the information using simpler language and more visuals on Telegram, Rutube, VK, Odnoklassniki, Yandex Zen, as well as on the Financial Culture website and its pages on social media (Telegram, VK, Odnoklassniki)
In its communication on monetary policy, the Bank of Russia sticks to a ‘single voice’ policy. This implies that the Bank of Russia’s representatives should communicate to the audience a single and consistent opinion on monetary policy, assessment of the current economic situation and forecasts of the Bank of Russia.
This is important for economic agents to correctly comprehend the Bank of Russia’s actions, which influences their expectations regarding monetary policy and inflation trends.
Many central banks worldwide pursue ‘single voice’ policies.
Financial markets are traditionally sensitive to central banks’ communication prior to decisions on monetary policy. Therefore, it is crucial to eliminate the risk of any ambiguous interpretation of such statements or publications and thus avoid increased uncertainty of market participants’ expectations and excessive market volatility.
In view of this, the seven days before a key rate decision to be made by the Board of Directors are the quiet period (from 01:30 PM Moscow time on the seventh calendar day prior to the decision until 01:30 PM on the day of the decision). During this period, the Bank of Russia’s representatives may not speak in public or publish any information on monetary policy issues, the assessment of the current situation or forecasts of the Bank of Russia which may affect financial market participants’ expectations. In addition, representatives of the Bank of Russia do not hold any meetings during the quiet period with banks, the expert community or investors on monetary policy issues.
The quiet period is a common practice employed by central banks worldwide.
The Bank of Russia seeks to increase the audience reach in monetary policy communication. Since autumn 2017, the Bank of Russia has held regular information campaigns in the regions. Within such campaigns, the Bank of Russia’s representatives meet with the regional business and academic community and representatives of state authorities, deliver lectures and hold seminars at universities and schools, and give interviews to local newspapers, radio stations, TV channels and bloggers.
Every Russian region is unique. Therefore, the Bank of Russia’s team customises its approach to each region, discussing problems that are urgent for businesses and households in a particular region, explains inflation trends with regional examples, takes part in discussions on topical issues, and, which is equally important, receives information from primary sources that is later on analysed and used in decision-making.