皇冠体育app

By Fan Jianjun, General Office, DRC

Research Report No 163, 2015 (Total 4848)

Abstract:

The system of "raising and lowering interest rates" in the sense of monetary policies especially refers to the fact that the central bank makes adjustments based on equilibrium borrowing and lending prices of inter-bank market monetary base, rather than on benchmark interest rates for savings and loans. In terms of the trend of the weighted average Shanghai interbank offered rate between January to September 2015, 皇冠体育app's current monetary policy operations are generally in a state of disorder. This is mainly because 皇冠体育app's broad money M2 and inflation index CPI have major flaws in statistics designing. The former incorporates a large number of non-monetary time deposits and the latter are unfit for measuring 皇冠体育app's inflation level, both "misleading" current monetary policy operations of the central bank. It is suggested that the central bank make major adjustments on 皇冠体育app's monetary policy macro-control framework, especially the system of "raising and lowering interest rates": abandon the M2 growth rate target, adopt instead Shanghai interbank overnight lending rate or overnight repurchase rate as 皇冠体育app's monetary policy intermediate targets, and make the latter 皇冠体育app's market benchmark interest rates, so as to adjust operations of "raising and lowering interest rates" from centering around benchmark interest rates for savings and loans in the past to centering around overnight lending rate or overnight repo rate.