The Czech National Bank's monetary policy in the media

This is an analysis of the favorableness and extent of the media coverage of the Czech National Bank's (CNB) monetary policy decisions in the period of 2002–2007. An extensive set of articles published in the four most relevant Czech daily broadsheets is used along with parameters of the CNB's actual monetary policy decisions, related communication and variables characterizing the economic environment. The most appealing results are that those CNB decisions that surprised financial markets were not negatively perceived by the media and that interest rate changes increased both favorableness and extent of media coverage. Therefore, from the media coverage point of view, there was no need for too much smoothing when setting the interest rates. ► Surprising interest rate decision does not influence favorableness of media coverage. ► Surprising decisions lead to more extensive coverage in the media. ► Media appraise interest rate changes regardless of their direction.