The Central Bank's Monetary Policy Announcement On The Stock Market Liquidity

It has been demonstrated that monetary policy disclosure will have an impact on stock price and stock market liquidity. This article aims to analyze the impact of monetary policy disclosure on stock liquidity, by the means of event analysis method. It also tries to prove if there is such impact when disclosing monitory policy, and see if the impact is a beforehand one, immediate one, or lagged one. In this article, the author choose four event between 2003 and 2006, using non-liquidate index and turnover as stock market liquidate index, conducting significant test on the impact of monitory policy disclosure.There are five parts in the article. The first part summarizes the impact of monitory policy, and points out the innovation and deficiency of the article. The second and third part reviews the reference and lists down the research step. The fourth part, which is the key part of the article, makes use of statistic method by bringing in dummy variable to analyze the impact of monitory policy disclosure. The last part concluded the research.In all, it is proved in the article that central bank's interest adjustment policy and deposit reserve rate policy have an impact on stock market liquidity when disclosing, what is more, the impact will differ according to different market operation conditions.