CNB Transparency and Monetary Policy

Published: 17/10/2017
Publication Surveys
Issue S-25
Authors Katja Gattin Turkalj and Igor Ljubaj
Date August 2017
JEL E52, E58, E61
ISSN 1334-014X


transparency, central bank, monetary policy, CNB


Central bank transparency implies clarity and openness in the implementation of monetary policy and comprehensive communication with the professional and general public. Transparency includes various aspects of activity, primarily the transparency of monetary policy instruments as well as procedural transparency and transparency of implementation. It is closely connected to central bank independence, which implies the highest level of accountability. In addition, transparency is significantly determined by the monetary policy framework and, particularly, by the exchange rate arrangement. Literature measuring central bank transparency is relatively scarce, and established measures are biased in favour of inflation targeting regimes, which in the literature are considered the most transparent. Therefore, essential monetary framework characteristics can by themselves make individual central banks more or less transparent. If various monetary policy frameworks and exchange rate arrangements are considered, the CNB's transparency is around the average of peer countries, while regarding financial stability, it is significantly above the average. The Croatian National Bank increased its transparency from 2010 to 2017, in line with the general trends.