Research On The Benchmark Interest Rate Of Money Market In China

The interest rate marketing reform of our country make fundamental change in many fields including the formation and adjustment of money market interest rate, macrostructure adjusting mechanism of the money market. There is an interest rate that can influence others. It is the reference interest rate of other market interest rate, therefore, it is the target interest rate that the monetary policy monitoring and influencing. This paper is going to make a research on this rate called benchmark interest rate of money market. The author believe that the mutual impact of the benchmark interest rate and other rate is the core issue when the benchmark interest rate is decided, and this paper will focus on the process of benchmark interest rate determination..The first step of this paper is to define the concept of the benchmark interest rate of money market, and analyze its characteristic and make a comparison with other representative rate .The second step is to make a qualitative analysis in accordance with criterion of the benchmark interest rate determination, then give the conclusion which rate is better to be the benchmark interest rate, the inter-bank rate or the national debt repurchase rate. The third step is fix quantify analysis base on historical data. and the quantify analysis will make a comparison among the inter-bank rate, the national debt repurchase market transaction amount,main participant and risk. This paper will make a related analysis between 7 days of the inter-bank rate and the national debt repurchase rate, which prove the dissymmetrical pertinence relationship between them. Then the author makes a controllable analysis, comparing the affect of central bank on them. This paper will get the conclusion that the interest rate of 7 days national debt repurchase rate is better to be considered as the benchmark interest rate base on analysis of qualitative analysis and quantify analysis. The fourth step is to foresee the prospect in the development of national debt repurchase market and n national debt repurchase interest rate. At last this paper is going to make analysis on the disadvantage of national debt repurchase rate as the benchmark interest rate of money market and give suggestion for the improvement.