Understanding Monetary Policy Communication in a Small and Open Economy Under an Exchange Rate Anchor: The Case of North Macedonia

Abstract

ABSTRACT The aim of this paper is to provide insights into the readability, structure, and tone of monetary policy communication in the case of the National Bank of the Republic of North Macedonia (NBRNM), a small and open economy operating under an exchange rate anchor. The results indicate the NBRNM generally communicates with a neutral tone while its communication is complex in terms of syntax and structure. The dominant topic is inflation and financial markets, followed by monetary policy, economic growth, and the foreign exchange market. Further, topic proportions and tone are analyzed in relation to key macroeconomic indicators.