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Haryo Kuncoro, Gatot Nazir Ahmad and Dianta Sebayang
''A textual analysis of central bank communication the case of Indonesia''
( 2021, Vol. 41 No.3 )
The objective of this paper is two-fold: (1) to assess the textual aspects of the Central Bank of Indonesia's monetary policy communication and (2) identify their potential relation to the inflation expectations. Using monthly policy interest rate press release announcements, we found that the text readability is relatively stable, although the text complexity is higher. However, the clarity and readability of the text are negatively correlated with the inflation expectations. Meanwhile, the tone of the text is positively associated with the inflation expectations. They suggest that the central bank should strengthen the quality of the text announced and pay more attention to the informal communication channels. The high quality and use of informal communication channels provide additional pieces of information in shaping price expectations in the future.
Keywords: Central Bank Communication, Text Mining, Monetary Policy, Inflation Expectations
JEL: E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit: General
E3 - Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data)
Manuscript Received : Jan 01 2021 Manuscript Accepted : Sep 18 2021

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