Effects of monetary policy announcements on exchange rate volatility: an analysis for Colombia, 2008-2015

Juan Camilo Galvis Ciro, Claudio Oliveira de Moraes, Juan Camilo Anzoátegui Zapata


This paper seeks evidence on the effects of central bank communication. To do this, the ability of financial markets to predict monetary policy decisions in Colombia is evaluated. Also, the effects of surprise decisions by the central bank of Colombia on exchange rate volatility are estimated. The results show that central bank communication decreases the volatility of the exchange rate. In addition, it is found that other variables such as external risk, the price of oil and external interest rates affect exchange rate volatility in Colombia.


monetary policy; central bank communication; exchange rate


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DOI: https://doi.org/10.17533/udea.le.n87a03

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