1, statutory deposit reserve ratio policy (ReserveRequirementratio)

The real effect of the statutory deposit reserve ratio policy is that it can expand the credit of deposit money banks and adjust the money multiplier. If the central bank adopts a tightening policy and raises the statutory deposit reserve ratio, it will limit the credit expansion ability of deposit money banks, reduce the money multiplier, and eventually shrink the money supply and credit quantity, and vice versa.

2. rediscount policy.

Deposit money banks ask the central bank for discounts on commercial bills discounted by customers in order to obtain credit support from the central bank. Adjust the rediscount rate according to policy needs. If the central bank raises the rediscount rate, the cost of borrowing money from deposit money banks will rise, and the base money will shrink, and vice versa.

3.openmarketoperation。

The central bank conducts securities trading activities in the open market with the purpose of regulating the base currency, thus affecting the money supply and market interest rate. Open market business is a flexible financial control tool.

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The deposit reserve policy is to take a certain proportion of deposits from banks and deposit them in the central bank to prevent banks from lending all their deposits and depositors from withdrawing them, thus ensuring the bank's capital flow; Open market business means that the central bank regulates the money supply in the market by buying and selling securities and foreign exchange; Rediscount policy means that the central bank affects the credit scale and market interest rate of commercial banks by increasing or decreasing the interest rate of converting the unexpired bills held by commercial banks into cash;

The deposit reserve policy is aimed at the cash flow of commercial banks by the central bank and has the strongest impact on the economy. Open market business is the direct transaction of money by the central bank, which regulates the market money supply and has less influence than the deposit reserve. Rediscount policy is the central bank's interest rate adjustment to commercial banks, which has less impact on the economy than the deposit reserve.

The goal of monetary policy

The goal of monetary policy is the ultimate goal of monetary policy adopted by a country's central bank or monetary authority. Including economic growth, stable price level, full employment, stable interest rate, stable exchange rate and balance of payments. Although the central bank cannot directly bring about these situations, it can formulate different policies according to the variables it can influence.

The ultimate goal achieved through the formulation and implementation of monetary policy is the highest code of conduct for monetary policy makers: the central bank.

The goals of monetary policy can generally be summarized as: price stability, full employment, economic growth, balance of payments and financial stability.

Stabilizing prices refers to controlling the change of the overall price level within a relatively small range, and there will be no big or drastic fluctuations in the short term.

Full employment refers to reducing the unemployment rate to a level that a society can bear.

Economic growth means that the economy is in a state of steady growth for a long time, with each period getting better, without ups and downs and recession.

The goals of monetary policy include: the ultimate goal, the intermediate goal and the operational goal.

To sum up, due to the contradiction between the objectives, the central bank should choose specific policy objectives according to different situations.