What is a statement of monetary policy?
The statement of monetary policy is a document distributed by a bank that outlines the state of the economy and organization from several different perspectives. It is usually arranged in several numbered sections that cover problems such as market changes, trends and effects of any important events that took place in the previous period. The updated version of the document is usually distributed quarterly. It is a source for investors and demonstrations of how the bank works in an economic climate. This describes a large picture of the view of the current economy, including the power of the local currency and any positive and negative trends. It will also usually discuss the current risks and benefits in the current environment. After an overview or introduction, some categories found in a typical statement include information about domestic and international financial conditions and the overall economic outlook of next year or two. Other potential sections include a statement of particularly strong trends, wage changes or pricesand macroeconomic forecasts.
Monetary policy statement also often outline how the bank manages both external changes outlined and internal problems. It may include information on how it followed in relation to monetary policy and its progress towards its goals. A typical statement will also include a bank strategy for the next few years. This information usually shows how the bank is in response to current economic activity.
often also describes a statement about monetary politician development on financial markets. Usually it will include domestic and international information and may be compared. This information can be used to measure the current market status and as a prediction tool.
If the main event has been influenced by the economy in the past period, the impact may be described in the statement of monetary policy. This may include natural disasters such as earthquakes and tsunami.It may also include events such as war and terrorist attacks. Depending on the size of the message, this information may not have its own section.