The Effects Of The Effectiveness Of Monetary Policy On China Currency Mismatch

In the case of countries around the world do not achieve a unified currency, the currencymismatch is inevitable long-standing and difficult to eliminate. currency mismatch refers tothe phenomenon that the currency of assets does not match the structure of liabilities, or thecurrency of income does not match me structure of expenditure，for the use of differentcurrency values． China is the emerging market countries, there are serious debt currencymismatch, the current implementation of monetary policy is ineffective, which is a fairlyclose relationship with the presence of currency mismatch.In this paper, a combination of theoretical analysis and empirical analysis, from the thecurrency mismatches angle demonstrate the effectiveness of monetary policy in China.Estimated by the net foreign asset position of the scale and extent of currency mismatch, seeChina’s currency mismatch huge debt currency mismatch, and showed a worsening trend inrecent years. Analysis of currency mismatch pairing the impact of the monetary policytransmission mechanism, that is, in the presence the currency wrong with the society as awhole, it will increase the money supply, taking into account this effect when the monetaryauthorities and no currency mismatch in the formulation of monetary policy, changes ininterest rates may not be adjusted to the desired level, that tight monetary policy can notachieve the purpose of raising interest rates, expansionary monetary policy can not lowerinterest rates, eventually leading to monetary policy on the increase in output and prices stableregulation is inhibited. The same time, the currency mismatch rigid a country’s exchange rate,loss of elasticity, once the exchange rate loses its elasticity, the flexibility of the exchange ratechanges is limited, the exchange rate of the monetary policy transmission mechanism of theeffect will be greatly reduced.Empirical analysis shows that the existence of the debt currency mismatch, recessiveincrease the money supply, affecting the effectiveness of the state through the intermediatetarget of monetary policy to regulate the economy; currency mismatch exists, a negativeeffect on interest rates, the impact of the monetary policy intermediate target; the currencymismatching price changes have a significant impact on the presence of currency mismatch,resulting in passive money supply growth, to enlarge the price effects of monetary policy topromote price increases, exacerbated by inflation; currency mismatching economic growth nosignificant impact, there is no currency mismatch, robust, and active monetary policymonetary policy can make a significant output effect, the presence of currency mismatch doesnot significantly inhibit this effectiveness of play.The results showed that, due to the presence of Chinese currency mismatch, resulting in the base currency passive delivery, passive adjustment in interest rates, inhibit economicgrowth and to promote the price level rose. On this basis to strengthen the capital market, theadjustment of economic development strategies and trade patterns, to strengthen themanagement of foreign exchange reserves, the establishment of the regulatory system forcurrency mismatch, accelerate regional monetary cooperation, and policy recommendations topromote the internationalization of the RMB, weakening our currency mismatch, reducecurrency mismatch weaken the degree of effectiveness of monetary policy.