Research On The Policy Of Monetary Sterilization By Central Bank Bills In China

Since 2000, the foreign reserve has increased sharply in our country, which influences the national money supply. The central bank of our country has to carry out the monetary sterilization. Since September, 2002, the central bank has issued central bank bills alone, and made it the main tool of open market operation, absorbing the liquidity. So, the research of the effects and limits of the central bank bill sterilization policy is significance, and it can supply some reference for the adoption of sterilization policy in the future.This paper chooses the portfolio balance model as the basic theorical model first, analyzing the operation of monetary sterilization and the economic effects. Then combined with the sterilization practice of some countries, it concludes that issuing central bank securities to carry out sterilization is extentive method.After that this paper analyzes the current situation of central bank bills in our country, and discusses the effects and limits of the policy. The research on the effects of central bank bills sterilization is based on the judgment that the sterilization in our country is valid. As to the research of the limits of the policy, this paper applies the empirical analysis to discuss the policy's influence on the money market rate and the treasury bill market.Finally, according to the analysis, this paper gives some measures to advance the policy of monetary sterilization, including expanding the scope of the issue objects and terms of central bank bills, using various monetary policy tools flexibly, developing the treasury bill market and so on.