Reforms in China’s Monetary Policy Reforms in China’s Monetary
Chapter 1 : Monetary Theory
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- Chapter 2 : Monetary Policy
| Chapter 1 : Monetary Theory
The first chapter proposes the credit money theory that loans create deposits and the loan-deposit gap is not the representation of fund available for banks but only the deposits created by means other than loans (say foreign exchanges purchase). It also includes the design of the monetary policy framework and evolutionary path under the structural liquidity deficit (a paper written in Stanford University in 2004 when I was a visiting scholar), which suggests that the central bank should issue central bank bills and raise the required reserve ratio in the mid-to-long run and pay back the bills when the foreign exchanges keep flowing in. The supply and demand of reserves should in gen- eral be balanced but a small amount of shortage should be allowed under the liquidity management framework. When the foreign exchange inflow dried Introduction ● 5 out, the central bank can keep the required reserve ratio relatively stable and inject liquidity through open market operations, relending, and rediscount- ing to manage liquidity and money market interest rate. This is largely in line with the logic that the internal and external environment of China has pushed the monetary policy to be more price-oriented. Chapter 2 : Monetary Policy The second chapter discusses some focal issues concerning monetary policies in certain period of time, including the evolution and development of China’s Monetary Policy framework, the major features of China’s monetary policy in the new century, the analysis of the transmission mechanism of China’s open market operations, and the design of the forecasting framework of banking sector liquidity that tackle the problem of versatile reserves demand. It also suggests expanding the types of collateral accepted by the central bank and strengthening the bond assets management. It proposes that open market operations should be tuned to the target of short-term interest rate in order to contain the volatility of money market rate. tải về 1.53 Mb. Chia sẻ với bạn bè của bạn:
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