INSUBCONTINENT EXCLUSIVE:
By Enda CurranCentral banks in emerging economies are more likely to surprise investors with unexpected decisions than their counterparts in
developed nations, according to a study by Bloomberg Economics.
An analysis of decisions from Group of 20 central banks since 2010 found
transparency revolution in central banking has all but eliminated surprises from Federal Reserve, European Central Bank and Bank of England
linked to opaqueness among emerging economy central banks compared with their developed peers
Ranked against five criteria, the Fed, Bank of England and Bank of Japan came out as the most transparent, while the PBOC surprises more.
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the PBOC, as there are no scheduled meetings, we classify surprises as decisions that were not anticipated by the market at the start of the
Bank of England, Bank of Canada, and ECB were the least surprising of the G-20 central banks, with unexpected decisions, on average, at just
3 percent since 2010.
China, Russia, India and Brazil surprised the most, at an average of 25 percent of the time.
Transparent BanksTo
assess the transparency of a central bank, Bloomberg Economics looked at five criteria: whether the bank has scheduled policy meetings,
published minutes of the meeting, a post-decision press conference, off-record briefings for journalists, and speeches by policy makers.
On
decisions as those that deviate from the median forecast in Bloomberg surveys
Inter-meeting decisions are also considered surprises and for those central banks that do not hold regularly scheduled meetings, like the
in policy are the biggest source of surprises
The central banks of Brazil, Russia, India, China and South Africa have on average had 1.7 surprises per year since 2010 and 2.5 surprises
