The Study Of China’s Monetary Policy Transmission Mechanism Under The Background Of Interest Rate Liberalization

For a long time, even we can say form the day when the monetary policy theory was born, monetary policy transmission mechanism is the research focus of monetary policy theory. Whether the monetary policy transmission channels unblocked, the transmission mechanism of monetary policy is sound, related to the realization of the ultimate goal of monetary policy. The pace of interest rate marketization reform has sped up, since comprehensively deepening reform 2013, now it has entered into the last step, that’s to say, the liberalization of deposit interest rate control. Zhou Xiaochuan, governor of the PBC, at a press conference ofNPC and CPPCC in this year, also said that he predicted deposit rate regulation would release at the first half of this year. Therefore, it is important to study what the China’s monetary policy transmission mechanism will do different and the effectiveness of monetary policy transmission mechanism will be how to change, under the background of interest rate marketization.This paper uses the method of combining the theoretical analysis and empirical analysis, comparative analysis. It elaborates the related theory of monetary policy transmission mechanism systematically, the history of monetary policy transmission mechanism in our country systematically. And analyzing the factors that affect the effectiveness of monetary policy transmission mechanism from three aspects:the subject of monetary policy transmitting, the object of monetary policy transmitting, and the others. On this basis, it analyses the impact of interest rate liberalization on China’s monetary policy transmission mechanism effectiveness. Mainly including the interest rate marketization’s influence on the subject of monetary policy transmitting, and the validity of the mainly transmission channel of monetary policy in China’s current. This paper also analyses the interest rate transmission channel since the market-oriented reform of interest rate, by using econometric methods such as co-integration test, impulse response function in two stages. And then it comes to a conclusion that the marketization of interest rate will make the effectiveness of the interest rate transmission channels gradually increases, the effectiveness of the credit transmission channels gradually weaken.Based on the above analysis, this paper puts forward policy suggestions to improve the effectiveness of China’s monetary policy transmission mechanism under the background of interest rate marketization. Mainly includes optimizing the behavior of the subject of monetary policy transmitting; improving the benchmark interest rate system; improving the monetary market and capital market; improving the linkage between capital market and monetary market; accelerating the construction of social credit system; improving the coordination between monetary policy and related policies.