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Analytical Note Finds Monetary Policy Statements Text Meets Policy Aims

An Analytical Note released today by the Reserve Bank of New Zealand – Te Pūtea Matua has found that Monetary Policy Statements are written in a way that matches the aims of monetary policy.

The Note provides a textual analysis of 100 Monetary Policy Statements between 1997 and 2021.

Analytical Note: Words of the RBNZ: Textual analysis of Monetary Policy Statements

This analysis shows that keywords mentioned in the Monetary Policy Statements (MPS) align with the objectives in the Remit.

The tone of the MPS has been neutral and objective, even as the sentiment in the MPS moves in line with household and business confidence surveys.

“Clear communication helps New Zealanders understand monetary policy and its relationship to them. We use different communication channels to explain to the public the purpose and rationale behind monetary policy decisions. When done right, this can enhance monetary policy transmission via different channels,” the Note says.

When the MPS is analysed by keyword, price-related topics have been discussed most often. This is consistent with the price stability goal of monetary policy. Employment-related topics were mentioned only occasionally at first, but started to appear more often around 2014 – even before the addition of an employment goal for monetary policy in 2018.

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Sentiment measures suggest that the MPS is in tune with the mood of businesses and the public. Sentiment is a measure of whether the words used are generally positive or negative. The analysis reveals that the sentiment of the MPS is correlated with surveyed business confidence and consumer confidence.

Similar to monetary policy documents published by central banks overseas the MPS is complex, but suitable for the intended expert audience.

More information

The Reserve Bank encourages people to read our full Monetary Policy Statement, or our Monetary Policy Snapshots for a 3-page summary. We also have a short video explaining the decision (2 minutes) or you can watch a recording of our media conference.

Monetary Policy Statement May 2023

Monetary Policy Snapshots May 2023 (PDF, 242KB)

Watch RBNZ Chief Economist Paul Conway explain our May 2023 Monetary Policy Statement decision

Watch our Monetary Policy Statement media conference - 24 May 2023

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