How SBP Communicates With General Public; Do People Understand Monetary Policy
Author: Bushra Maryam Zahra

This study empirically investigates the multidimensional aspects of information in Monetary policy of State Bank of Pakistan; that comprises of monetary policy statements (MPS) published by Monetary Policy Committee (MPC) and policy rate. The tone and effect of monetary policy communication is investigated on macroeconomic variables, fiscal variables and financial variable i.e., inflation, policy rate, credit intake, LSM, imports, exports and trade deficit. The analysis is carried out using time series data from monetary policy statements over the period of 2005 to 2021. Empirical model is estimated by using Granger causality test and Autoregressive Distributed Lag (ARDL) technique. Results of the study show a significant and positive relation between LSM and Policy rate and vice versa. Primary data suggested that only 8.7 percent of respondents are familiar with monetary policy. The study provides specific evidence to policymakers that improves and further enhances the transparency and credibility of monetary policy formulation process. Furthermore, this research would help SBP in reviewing policies and incorporating the key components in order to accomplish a favorable feedback from public and retain them over time. Supervisor:- Dr. Nadeem A. Khan

Meta Data

Keywords : Autoregressive Distributed Lag (ARDL), Granger Causality Test, MONETARY POLICY, State Bank of Pakistan
Supervisor: Nadeem Ahmed Khan
Cosupervisor: Saud Ahmed khan

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