Central Bank Communication And The Effectiveness Of Monetary Market

Economic development is inseparable from financial support, and as an important part of the financial markets, the monetary market plays an important role of promotion of economic development. Monetary market is short-term capital market, who aims to maintain founds liquidity. Monetary market take advantage of a variety of financing tools to link the remainder capital supplier and the capital demander in the short-term monetary market, it offers the capital supplier an opportunity to obtain a profit at the same time meet the capital demander for short-term funding needs. Monetary market acts as a bridge to connect the remaining capital supplier and capital demander for the efficient allocation of funds, provides an effective flow path. However, providing the trading platform is only a basic function of short-term monetary market funds, monetary market have big power when it is used in the whole financial market and the macroeconomics, monetary market has much more functions.Providing short-term funding in the money market trading platform to ensure effective financial intermediation, while the existence of the transaction price is also the implementation of monetary policy for the central bank to provide an effective macro-control regulation base. Monetary market contributes more to maintain financial stability, and promote economic development.As the constitutor of monetary policy, the central bank stands at a unique position in the market has a decisive influence, and its every move will be reflected in the market. Central Bank pass out information about future monetary policy objectives, policies, and strategies-The central bank information communication- will thus have a certain degree of influence on the macroeconomic impact of the market by psychological expectations of the public, to guide economic policy economic agents. With the transparency of monetary policy, the impact of central bank(information) communication on macroeconomic regulation gradually revealed, the central bank information communication gets more attention and many countries bank facilities put it use into the actual macroeconomic regulation and control. As monetary market macro-control base, when the central bank regulate money market, it will directly affect the realization of macroeconomic objectives. Central bank money market regulation mainly through monetary policy tools to manage physical intervention fund transaction price to achieve. The transaction price is the channel of interest rate, with the deepening of reform and market-oriented interest rate, the central bank will gradually liberalized interest rate controls, interest rates will be decided by the market. Under this playground, the information communication of the central bank appears to play a particularly important guiding role in the monetary market.As a result, based on the thinking of the central bank communication can be used to the benefit of the monetary market stable development. This dissertation takes the oversea and domestic existing research for a reference and abroad on the use of China official statistics date from 2006 to 2015, through constructing a structural vector auto regression model examines the central bank monetary communication effects in the monetary market. The result shows: central bank communication have a conspicuous impact on the monetary market, to ensure stable and healthy development of the money market can play a role to some extent. Through in-depth analysis of the empirical results and the actual situation, this dissertation puts forward relevant policy recommendations to make the central bank to communicate play a better role in monetary policy.