Central Bank of Kenya (CBK) is aggressively reforming its public communications function in response to high demand for policy information by various stakeholders. Governor Njuguna Ndung’u observed that communication is essential to the functioning of any modern central bank as a policy tool. “He said that communication enhances effectiveness by improving public understanding of policy objectives and enhancing the legitimacy of the message.
“An overriding priority for a central bank is to provide financial markets and by extension the general public, the confidence that its policy actions are in the public interest,” said Prof Ndung’u. By clearly explaining its objectives, he explained, central banks gain public support and in the process, secure the opportunity to shape expectations and influence behaviour in a desired direction. He said the last 15 or so years has witnessed major shifts regarding how central banks view their communications.“The shift is validated by the linkage between enhanced communication and the achievement of economic outcomes.
Transparency in the policy making process creates partnerships and best outcomes,” said Ndung’u during a business workshop organised by the banking sector regulator in Naivasha. He said the prevailing emphasis on communication was informed by the need to balance increased demands for central bank independence with an equally necessary accountability to the public.
