Aug 27, 02:20 AM

Eswar Prasad Critiques People's Bank of China for Lack of Transparency and Balance Sheet Clarity Amid Market Turmoil

The People's Bank of China (PBoC) is facing criticism for its lack of transparency regarding monetary policy. Analysts argue that the central bank's opacity leaves financial market participants uncertain about its strategies, particularly concerning interest rates. Eswar Prasad highlighted that the PBoC lacks statutory independence, which hampers its effectiveness. He suggested that improved communication of its strategies and policy actions could mitigate market turmoil. Furthermore, it was noted that the PBoC often reacts defensively to market developments instead of proactively managing expectations. This situation underscores the need for the PBoC to clarify its balance sheet data and enhance its communication with the market.

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Written with ChatGPT (GPT-4o mini).

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Michael Pettis@michaelxpettis
1 year ago
Eswar Prasad: "Rather than managing expectations about interest rates, the PBoC usually ends up on the defensive, reacting to market developments." https://t.co/yqgEYa9M1Z via @ft
Jonathan Cheng@JChengWSJ
1 year ago
FT op-ed: "The PBoC’s opacity leaves financial market participants guessing about its monetary policy strategy. Rather than managing expectations about interest rates…PBoC usually ends up on the defensive, reacting to market developments." @EswarSPrasad https://t.co/8V4d70uGwU
Brad Setser@Brad_Setser
1 year ago
Eswar Prasad is right on this -- I thought would add that the PBOC could start by clarifying its own balance sheet data https://t.co/2OkK6DfqFI https://t.co/Zjx5mGUOXz

Eswar Prasad Critiques People's Bank of China for Lack of Transparency and Balance Sheet Clarity Amid Market Turmoil

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