Can Central Banks Be Heard Over the Sound of Gunfire?

Ge Gao, Alex Nikolsko-Rzhevskyy and Oleksandr Talavera (oleksandr.talavera@gmail.com)
Additional contact information
Ge Gao: Beijing Sport University
Alex Nikolsko-Rzhevskyy: Lehigh University

Discussion Papers from Department of Economics, University of Birmingham

Abstract: In this study, we examined the effectiveness of central bank communications during times of significant adverse shocks. Specifically, we examined how the National Bank of Ukraine (NBU) regulated foreign exchange (FX) markets during the Russo-Ukrainian War in 2022. Data collected from both the black and authorized FX markets suggested that the content of the NBU's announcements significantly impacted FX market agents. Announcements aimed at maintaining a fixed (floating) FX rate prompted an increase (decrease) in the black market premium in cash transactions. Moreover, the NBU's announcements influenced the sale side of foreign currency more than any other aspect, an area where the black market FX traders held near monopolistic power.

Keywords: Russia-Ukraine war; central bank communications; black market premium; forex; ChatGPT (search for similar items in EconPapers)
JEL-codes: D83 E44 E58 F31 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2023-10
New Economics Papers: this item is included in nep-ban, nep-cba, nep-cis, nep-ifn, nep-mon and nep-tra
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Citations: View citations in EconPapers (2)

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Journal Article: Can central banks be heard over the sound of gunfire? (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:bir:birmec:23-09

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