Monetary Policy Communication and RMB Exchange Rates: Text-Based Evidence from PBoC Meeting Minutes

We examine whether, how, and when the People’s Bank of China’s (PBoC) meeting minutes are associated with movements in the Renminbi (RMB) exchange rate. Using 2002Q3-2024Q4 minutes, we build quarterly, channel-specific signals (economic-monetary, inflation-monetary, and exchange-rate) via sentence embeddings and principal components. Panel local projections on bilateral RMB rates, controlling for macro differentials and global risk, deliver three results: (i) The inflation-monetary signal exhibits the strongest appreciation-associated response, amplified after the 2015 reform and in high-volatility states; (ii) The exchange-rate signal is linked to short-horizon dampening of depreciation pressure, with clearer responses post-2015 and against BRICS currencies; (iii) The economic-monetary signal is weak on average, but becomes more informative during turbulence and for BRICS counterparts. A configurational check further links the joint presence of anti-inflation language and explicit exchange-rate guidance to appreciation episodes. We contribute by providing internationally comparable, minutes-based evidence on conditional exchange-rate responses in a major emerging market.