A Study On Open Market Operation With Central Bank Bill As A Tool In Our Country

After resumed by Chinese Central Bank in 1998, open market operation gradually becomes to be the important instrument for the central bank's monetary policy, which plays a more and more important role to in regulating money supply and interest rate in monetary market.The surplus on our country's balance of payment is keeping expanding, and the influence on the appreciation of the Renminbi becomes larger and larger in recent years, which lead to China's foreign exchange reserves rising considerably. As a result, the base money put into circulation is overabundance and the liquidity in the banking system is overplus, which cause latent inflationary pressures. In this condition, the central bank's open market operation looked incapacity for lack of government bond holding in hand and the limitation of the government bond market. So in such a state of affairs, the central bank issued its'own bill----central bank bill as instrument of the open market operation through the inter-bank bond market to offset the excessive growth of base money brought by the continual growth of the funds outstanding of foreign exchange. The central bank bill becomes the main tool in open market operation operation, which has brought in tool innovation of the Chinese finance macroeconomic regulation, and plays a vital role in our country monetary policy operation. The issuance of central bank bill is increased continuously.However, whether the open market operation with central bank bill as a tool can effectively control of the money supply and the interest rates in money market?This dissertation was precisely from the discussion and the research of central bank bill as the open market operation tool. At first it introduced the general theory of the open market operation and its'tool, and introduce the successful operation experiences of the overseas'countries, then analyzed our country national debt market was immature and had many defects, which maked the production of the central bank bill, and explaind the present situation as well as the positive role of the central bank bill. Through the empirical analysis of our central bank bill operation effect, the dissertation explained that our country took the central bank bill as the instrument of the open market operation was effective at present, although its influence on money supply was less than that on interest rate in money market. Then summarized the central bank bill's limitations, thus pointed how to improve the open market operation.This dissertation proposed the measures to develop our country open market operation with central bank bills as the instrument. We should develop money market, and make the realization of the market-oriented interest rates to promote the development of our country economical finance foundation. We should reform the exchange control system, so it will block the linkage relationship between the foreign exchange reserve and the currency supplies, and we should make the open market operation coordinates with other monetary policy tools, which will reduce sterilization pressure of our country.