Central Bank Transparency and Financial Market: Evidence for the Brazilian Case

Abstract

The main objective of this paper is an empirical analysis concerning the effects caused by Central Bank of Brazil transparency on the Brazilian financial market. Furthermore, a brief review of the literature regarding central bank transparency is presented. The effects of the different dimensions of the monetary authority’s transparency on yield interest are examined. Moreover, the consequences regarding changes in the country risk are considered in this study. The findings denote that the Central Bank of Brazil transparency works as a guide for the future interest rate market and that the different dimensions of transparency contribute to a better market efficiency.

Keywords

• transparency
• accountability
• inflation targeting
• yield interest