Changes in the conduct and communication of monetary policy

Starting from 2008, the conduct and communication of monetary policy will undergo some changes. The main aim of these changes is to further increase the transparency, clarity and predictability of monetary policy.

The outlook for the Czech economy described in this Report discloses the forecast-consistent interest rate path in numerical form for the first time. To emphasise the uncertainty of the forecast for this and other variables, the outlook for key variables is illustrated using fan charts. More information about the reasons for publishing the interest rate path and about the construction of fan charts can be found in Box 2 Publication of the forecast-consistent interest rate path and the use of fan charts.

The disclosure of the votes cast by the board members on interest rate changes by name in the minutes of Bank Board meetings will also contribute significantly to transparency. Knowledge of the votes cast by name will enable the public to better identify the opinions of each board member and thus better understand the decisions of the Board as a whole. The board members will have more freedom to express their views in public. Increasing the board members’ individual accountability for their own voting will enhance the principle of majority decision-making at board level. This collective decision-making will continue to reflect the natural diversity of the board members’ expert opinions on economic and monetary developments.

Another change consists in a reduction of the number of regular monetary policy meetings to eight a year. Bank Board meetings will usually be held on the first Thursday in February, May, August and November and on the last Thursday in March, June, September and December. The publication schedule for related documents, including the Inflation Report, has been changed accordingly. The Inflation Report will be approved on the second Thursday and published on the second Friday in February, May, August and November. The reason for reducing the number of meetings is that the Czech economy has stabilised in recent years. Consequently, there is no need for such frequent changes in interest rates as in the early years of inflation targeting.