Original Research

Monetary policy transparency and financial market forecasts in South Africa

Vivek Arora
Journal of Economic and Financial Sciences | Vol 2, No 1 | a358 | DOI: https://doi.org/10.4102/jef.v2i1.358 | © 2018 Vivek Arora | This work is licensed under CC Attribution 4.0
Submitted: 01 July 2018 | Published: 30 April 2008

About the author(s)

Vivek Arora, International Monetary Fund, South Africa

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The transparency of monetary policy in South Africa has increased substantially since the end of the 1990s. But little empirical work has been done to examine the economic benefits of the increased transparency. This paper shows that, in recent years, South African private sector forecasters have become better able to forecast interest rates, are less surprised by reserve bank policy announcements, and are less diverse in the cross-sectional variety of their interest rate forecasts. In addition, there is some evidence that the accuracy of inflation forecasts has increased. The improvements in interest rate and inflation forecasts have exceeded those in real output forecasts, suggesting that increases in monetary policy transparency are likely to have played a role.


monetary policy; transparency; financial market forecasts; South Africa


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Crossref Citations

1. Do Monetary Policy Announcements Affect Exchange Rate Returns and Volatility of Returns? Some Evidence from High‐Frequency Intra‐Day South African Data
Cyril May, Greg Farrell, Jannie Rossouw
South African Journal of Economics  vol: 86  issue: 3  first page: 308  year: 2018  
doi: 10.1111/saje.12196