1. There are three general monetary policy tools, namely, adjusting the statutory deposit reserve ratio, rediscounting mechanism and open market business (operation). From 65438 to 0998, China abandoned the traditional direct financial supervision based on credit scale control, and implemented indirect monetary supervision based on open market operation and adjustment of statutory deposit reserve ratio.
2. Statutory deposit reserve ratio: refers to the deposit reserve ratio set by the central bank for deposits of commercial banks and other deposit financial institutions, and the deposit reserve is forcibly withdrawn and turned over in accordance with the prescribed ratio. Because of its strong regulatory function, it is not suitable for daily monetary policy operation tools.
3. Open market operation: Open market operation refers to a policy measure that the central bank publicly buys and sells securities in the financial market, and adjusts the money supply and interest rate by affecting the reserves of commercial banks, so as to achieve the monetary policy objectives. It is flexible and proactive, and can adjust the money supply at any time according to market changes. However, it needs the cooperation of developed financial markets, a large number of short-term treasury bills and other policy tools.
4. rediscount policy: rediscount policy refers to the policy measures taken by the central bank to achieve the monetary policy goal, by changing the rediscount rate, affecting the amount of rediscount loans obtained by commercial banks from the central bank, and adjusting the money supply and interest rate. This also helps the central bank to play its role as lender of last resort. However, its use is relatively passive and the interest rate level is limited. Frequent adjustments will also lead to frequent fluctuations in market interest rates.
On Monetary Policy
1) Monetary policy, that is, fiscal policy, refers to various guidelines, policies and measures adopted by the People's Bank of China to control and regulate money supply and credit in order to achieve its specific economic goals. The essence of monetary policy is that the country adopts different policy orientations such as "tight", "loose" or "neutral" according to the economic development in different periods.
2) Adjust the money supply and market interest rate through various tools, and influence private capital investment, aggregate demand and macroeconomic operation through the change of market interest rate. The four tools of monetary policy to adjust aggregate demand are statutory reserve ratio, open market business and discount policy, and benchmark interest rate.
3) The nature of monetary policy (the way the central bank controls the money supply and the relationship between money, output and inflation) is one of the most attractive, important and controversial fields in macroeconomics. A fiscal policy consisting of government expenditures and taxes. Fiscal policy mainly affects long-term economic growth by affecting national savings, stimulating work and saving.
4) Monetary policy, economic and financial policy. Monetary policy is implemented by the central bank and affects the money supply. By regulating the money supply, the central bank affects the degree of interest rate and credit supply, and indirectly affects the total demand of the economy, thus achieving an ideal balance between total demand and total supply.
5) The object of monetary policy regulation is the money supply, that is, the total purchasing power of the whole society. Specific forms are: cash in circulation and deposits of individuals, enterprises and institutions in banks. Cash in circulation is closely related to the change of consumer price level. It is the most active currency and has always been an important goal of the central bank.