BOK board member calls for ‘simple and direct’ communication on monetary policy

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SEOUL, Nov. 11 (Yonhap) — A monetary policy official with the Bank of Korea (BOK) on Friday stressed the need for “simple” and “direct” communication when the central bank tries to send signals to the market about its future policy directions.

Park Ki-young, one of the seven members of the BOK’s monetary policy council that determines the key interest rate, also pointed to the need for more research for the central bank’s effective communication with market participants. .

“Practical limitations such as public inattention, rigidity of information linked to an overreliance on past data, the possibility of misunderstanding and mismeasurement of inflation expectations could undermine the impact of foresight,” he said at a conference in Seoul.

“Central bank communication can be effective when it is simple, direct and via an information campaign,” he added.

Park said it is necessary to build infrastructure taking into account the national economic environment, accumulate experience related to communication and conduct relevant research.

Citing recent research findings, he also drew attention to the importance of “soft information” that could be provided in facial expressions, voice tones and other non-linguistic tools of senior officials that could have a “significant” impact on the financial markets.

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