Decoding Bank of Sierra Leone's Monetary Policy Communications: A Text Mining Analysis

This research paper presents the results of a text mining analysis conducted on the quarterly monetary policy statements published by the Bank of Sierra Leone. This study examines the effectiveness and readability of monetary policy communication by the Bank of Sierra Leone. The research focuses on evaluating the clarity and simplicity of the Bank's communication efforts from 2019Q1 to 2023Q1. Utilizing techniques such as word cloud extraction, keyword density analysis, and text readability metrics assessment, we analyzed 17 quarterly monetary policy statements, our corpus consist of 43 pages of text data. The findings reveal insights into the prominent themes, and linguistic characteristics embedded within the Bank's monetary policy statements. Through an examination of keyword frequency and thematic trends, the research shows that the Bank of Sierra Leone's monetary policy statements place emphasis on inflation management, economic growth, and consideration of exogenous factors affecting monetary policy implementation, with language and structure varying across quarters. Moreover, the analysis suggests that understanding these statements typically requires a college-level education, posing accessibility challenges for a significant portion of Sierra Leone’s population. The policy implications drawn from this analysis accentuate the importance of stakeholder engagement, transparency, adoption of digital outreach tools, local language communication, continuous monitoring and evaluation of the Bank’s communication strategy. This research contributes empirical evidence on monetary policy communication in Sierra Leone, offering insights for policymakers on how best to improve its communication strategies to financial market participants and the general public.