A Text Mining Analysis of Central Bank Monetary Policy Communication in Nigeria

Abstract

This paper employs text-mining techniques to analyse the communication strategy of the Central Bank of Nigeria (CBN) during the period 2004-2019. Since the policy communique released after each meeting of the CBN’s monetary policy committee (MPC) represents an important tool of central bank communication, we construct a corpus based on 87 policy communiques with a total of 123, 353 words. Having processed the textual data into a form suitable for analysis, we examined the readability, sentiments, and topics of the policy documents. While the CBN’s communication has increased substantially over the years, implying increased monetary policy transparency; the computed Coleman and Liau readability index shows that the word and sentence structures of the policy communiques have become more complex, thus reducing its readability. In terms of monetary policy sentiments, we find an average net score of -10.5 per cent, reflecting the level of policy uncertainties faced by the MPC over the sample period. In addition, our results indicate that the topics driving the linguistic contents of the communiques were influenced by the Bank’s policy objectives as well as the nature of shocks hitting the economy per period.

Analysing User Experience of Mobile Banking Applications in Nigeria: A Text Mining Approach

“…Second, it has been shown that the LDA yields superior outcomes in terms of generating semantically meaningful topics as well as assigning texts to the identified topics (Debortoli et al, 2016;Chang et al, 2009). Third, it has been used extensively in different applications, including Tumala and Omotosho (2019) for monetary policy communication in Nigeria; Omotosho (2020) for monetary policy communication in Ghana; and Hansen et al (2018) for monetary policy communication in the US. More importantly, the LDA allows not only for identifying the hidden topics, but also to estimate the degree to which each topic is reflected in the corpus.…”