Monetary policy communication has evolved from a practice of secrecy to a central instrument of monetary policy in an environment of persistent uncertainty. Drawing on global evidence and India’s experience under a flexible inflation-targeting framework, this article argues that effective communication enhances policy transmission by anchoring inflation expectations, strengthening monetary policy transmission and reinforcing central bank credibility. 

The authors are affiliated with the Monetary Policy Department, Reserve Bank of India (RBI). The views expressed in this article are those of the authors and do not........

© EPW