شفافیت بانک مرکزی و اعتبار : مورد لهستان، 1998-2004

In this study we analyse transparency and credibility of the National Bank of Poland's monetary policy under the inflation-targeting regime in the period 1998–2004. To verify NBP transparency we analyse the transparency of the monetary policy framework and the predictability of policy decisions. With respect to the former, we present some indicators suggested in the literature, while with respect to the latter we analyse the formation of interest rate expectations by commercial bank analysts. As far as NBP credibility is concerned, we evaluate the way in which inflation expectations of consumers and commercial bank analysts are formed and how they are related to the inflation target.

A central bank is credible if the public believes that the monetary authority will do what it says (Blinder, 2000). In the context of inflation targeting (IT) strategy this may be verified by analysing the gap between inflation expectations of economic agents and the central bank inflation target or forecast. Theoretical literature and empirical evidence show that transparency is essential for establishing central bank credibility. Transparency is a multidimensional phenomenon, which involves not only the issue of releasing adequate, in terms of its quantity and quality, information by the central bank, but also correct interpretation of the released information by the public. In this sense, transparency should enhance the ability of the private sector to predict monetary policy actions. The aim of our study is to test the transparency and credibility of the National Bank of Poland's (NBP) monetary policy in the years 1998–2004, as conducted under the inflation-targeting regime. In particular, we examine whether the inflation-targeting framework and the progress that the central bank has made with respect to communication with the public have helped private sector agents predict monetary policy actions and align their expectations with the inflation target. We use survey-based measures of inflation expectations of commercial bank analysts and consumers as well as survey data on commercial bank analysts' interest rate predictions. To verify monetary policy transparency we separately inspect its two dimensions, namely, the transparency of monetary policy framework and of monetary policy decisions. With respect to the former, we present some transparency indicators as suggested in the literature and make cross-country comparisons, while with respect to the latter we analyse in detail the formation of interest rate expectations by commercial bank analysts. As far as monetary policy credibility is concerned, we focus our study on the way in which inflation expectations of consumers and commercial bank analysts are formed and how they are related to the NBP inflation target. The results of our analysis lead to some puzzling conclusions on the effectiveness of inflation targeting in Poland in shaping expectations of the private sector. Even though transparency of the monetary policy framework in Poland, assessed by the quantity of information shared by the central bank with the public, seems to be relatively high, the predictability of interest rate decisions is weak and there are no signs of improvement in terms of macroeconomic efficiency of interest rate expectations. Despite persistent deviations from the target, the NBP inflation target constitutes an important information variable taken into account by commercial bank analysts. On the other hand, Polish consumers do not pay attention to the inflation target while forming their expectations regarding the future movements of prices. Monetary policy is not credible among consumers. This paper is organised as follows: Section 2 contains theoretical considerations on the relationship between central bank transparency and credibility, and summarizes the experience of inflation targeters in building transparency and credibility. In Section 3 we briefly describe the Polish experience with the IT strategy and verify the credibility of the NBP inflation targets, focusing on inflation expectations formed by consumers and commercial bank analysts. Section 4 tests the transparency of the NBP monetary policy framework and the predictability of interest rate decisions. The final section offers our conclusions.

Central bank transparency and credibility are closely related. Theoretical literature suggests that higher transparency should lead to higher credibility. This hypothesis is confirmed by empirical studies showing that the process of building credibility through transparency works in reality. It may be observed particularly in the performance of central banks operating within the inflation-targeting regime. As indicated in our study, the Polish experience with IT is not so convincing. In verifying the transparency of the NBP monetary policy, we inspected separately the transparency of the monetary policy framework and the predictability of monetary policy decisions. In the case of the former, our study, based on several indicators suggested in the literature, leads to the conclusion that the transparency of the National Bank of Poland is relatively high. It increased sizably after changes introduced to NBP Inflation Reports in August 2004, when the NBP staff inflation projection was published for the first time. On the other hand, our study suggests that the accuracy of interest rates expectations formed by commercial bank analysts did not improve under the IT as compared with the pre-IT period, so the transparency of monetary policy decisions seems to be fairly low. 21 Moreover, macroeconomic efficiency of interest rate expectations has deteriorated after adoption of IT and the uncertainty concerning monetary policy decisions increased. These results may suggest that the quality of information shared by the NBP with the public was unsatisfactory. One should bear in mind that major improvements in the NBP communication with the public, such as the publication of the NBP staff inflation projection with a formal risk assessment and related changes in the Inflation Report, making it more focused and forward-looking, occurred in 2004. Release of new pieces of information is reflected automatically in indicators of the framework transparency, while the public needs time to verify and understand the impact of inflation projections of NBP staff on MPC decisions, given that these projections are only one of the factors taken into account by policymakers, and that MPC members are not involved in the preparation of the forecast. The credibility of monetary policy is usually measured as the deviation of inflation expectations from the central bank inflation target or forecast. In the empirical part of our paper we estimated the weight attached to the NBP inflation target in the formation of inflation expectations of consumers and commercial bank analysts. There is a sharp difference between both groups of agents. In the case of commercial banks, the inflation target constitutes an important information variable taken into account while forming inflation predictions. It holds true even if the effects of interest rate forecast errors are filtered. Polish consumers do not pay attention to the NBP inflation target while forming their expectations. The probability attached by consumers to inflation remaining within the NBP inflation target range is significantly lower compared with opinions of bank analysts. It was characterized, however, by a positive trend, indicating a gradual increase of credibility of NBP inflation targets. Two major exceptions from this tendency were related to the fast disinflation 2002–2003 and the effects of accession to the EU in 2004. As the theoretical literature suggests, increased transparency of the monetary policy framework, reflected in the improvement of communication patterns, should lead to better predictability of monetary policy actions. From that point of view, relatively high transparency indices characterizing the IT framework of the National Bank of Poland and the low predictability of the NBP interest rates are puzzling, especially taking into account the high credibility of inflation targets resulting from the assessment of commercial bank analysts' inflation expectations. It occurs that despite repeated inflation target misses and interest rate decisions being inconsistent with their expectations, commercial bank analysts' trust in the NBP inflation targets was unexpectedly stable.