Sarb’s Marcus discusses developments in central bank communication

Gill Marcus says communication has become ‘fundamental’ to central bank strategy, but suggests there are limits to usefulness of transparency
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Gill Marcus, governor of the South African Reserve Bank (Sarb), on July 28 underlined the importance of effective central bank communication, but said some elements of transparency might not be beneficial.

Speaking at the South African National Editors' Forum in Durban, Marcus said transparency had become a "fundamental" part of central banking operations, in particular specifying the extent of central bank capabilities and providing the markets with predictable monetary policy decisions. Marcus said in the past, "unrealistic demands and expectations" had been placed on the Sarb, which effective communication should correct for.

The governor argued however that certain elements of communication might not be helpful. In particular, she said announcements by some central banks as to the future path of interest rates were too uncertain to be of any benefit. "The reality is that the further we go into the future, the less confident we can be about our future actions," Marcus said.

Click here to read the speech.

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