China’s Monetary Policy Instruments (2001-2010): Paradox, Analysis and Suggestions

Wang Guogang
Institute of Finance and Banking, Chinese Academy of Social Sciences, Beijing, China
Abstract: Through a systematic analysis of China’s monetary policy instruments adopted between 2001 and 2010, the author argues that raising required reserve ratios (or RRRs) cannot reduce the overall supply of funds, while raising the deposit and loan interest rate expands credit. Compared with the above two approaches, controlling incremental loan scale is more effective. During the 12th Five-Year Plan period (2011-2015), China should improve its monetary policy system in five aspects: the balance sheet structure of The People’s Bank of China (PBOC), the intermediary objective and operation instruments, market orientation of the deposit and loan interest rate, ultimate objective of monetary policies and establishment of a system framework for prudent macro financial management.
Key words: monetary policy, instrument, rationale, required reserve ratios (or RRRs)

¥0.01加入购物车