Research On Interest Rate Management Mode Under The Interest Rate Marketization

On October 24,2015,liberalization of deposit interest rate upper limit marks the end of China's interest rate marketization process.As the interest rate management department,the people's Bank of China choosing what kind of the interest rate management model to promote the healthy development of economic and financial has important practical significance.As a member of the people's Bank of China,it is our duty to study this subject and make some achievements.Based on the introduction of the reform of interest rate marketization and the changes of interest rate management mode,this paper points out the shortcomings and limitations of the interest rate management model before the completioin of the interest rate marketization,it is urgent to seek a new interest rate management model under the fully market-oriented interest rate.Through the research and comparison of the two kinds of mainstream interest rate management model "open market operation";"interest rate corridor" of the practice effect and the advantages and disadvantages,the auther finds that "interest rate corridor" mode is more effective,more directly to form stable rational expectations and play a greater role of the market.Combined with the current situation of China,the stability of China's money demand is declining and the regulation of interest rate corridor is becoming more and more mature.The author believes that the "interest rate corridor" mode is more suitable for Chinese conditions than the "open market operation" mode,and put forward several policy suggestions on improving interest rate management model,including construction of "interest rate corridor" to guide market interest rate in the initial stage of the marketization of interest rate,strengthening the industry self-regulation,strengthening the construction of interest rate corridor facilities,raising the level of financial institutions in interest rate pricing,improving the financial institutions interest risk prevention capabilities and other qualitative measures to guide.First of all,on the background of interest rate marketization,it mainly describes the related concepts and theoretical basis,including interest rate marketization,"interest rate corridor","open market operations"' and interest rate transmission mechanism.This paper introduces the process of interest rate liberalization in China and the interest rate management mode's changes.Among them,the interest rate marketization process mainly includes the liberalization of interbank offered rates,financial institutions deposit and lending rates.The interest rate management mode has been changed from "extensive" monorail management mode the "semi open" dual management mode to "basic marketization" dual management mode.Meanwhile,the people's Bank of China guide market rate of interest through open market operations.Secondly,this paper discusses the disadvantages of the interest rate management mode prior to completion,such as influence resource allocation efficiency,hinder the development of financial institutions,weaken the effect of macroeconomic regulation and control,restrict the integration of China's economy and the world economy,reduce quantitative regulation effect.In order to seek a new way,the auther analyses the practice of "open market operation" and "interest rate corridor" in the United States,Japan,Germany,Europe,the United Kingdom,Canada,India and compares the advantages and disadvantages and development trends.The auther finds that"interest rate corridor" mode is more effective,more directly to form stable rational expectations and play a greater role of the market.Based in international experience,combined with the fact that the stability of China's money demand is declining,the effect of quantitative regulation is weakened,and the regulation of interest rate corridor is becoming more and more mature(The interest rate system has been continuously enriched,the interest rate sensitivity and the bearing capacity of the micro economic entities have been strengthened,and the ability of the people's Bank of China to raise interest rates indirectly has been improved),the author puts forward the view that the mode of'interest rate corridor regulation" is more suitable for China.Thirdly,this paper puts forward suggestions about interest rate management mode after the completion of interest rate marketization,including construction of"interest rate corridor" to guide market interest rate in the initial stage of the marketization of interest rate,strengthen the industry self-regulation,strengthen the construction of interest rate corridor facilities(improving the system of the central bank collateral,developing multi-level financial market and variety of financial products,etc.),and improve the financial institutions interest risk prevention capabilities.The upper limit of "interest rate corridor" is the average value of the 20 days' relending interest rates,rediscount rates,and benchmark lending rate of less than 6 months.The lower limit is the average value of the excess deposit reserve interest rate,the central bank's 28 days repurchase rate and the central bank 7 days reverse repo rate.The only key policy rate is the average value of rediscount rates,the central bank's 28 days repurchase rate and the central bank 7 days reverse repo rate.The market benchmark interest rate is overnight repro rate.Finally,the main conclusions are summarized in this paper.The first one is it urgent to seek a new interest rate management mode under the fully market-oriented interest rate.The second one is that the mode of "interest rate corridor regulation" is more suitable for China.The third one,constructing "interest rate corridor" to guide market interest rate in the initial stage of the marketization of interest rate and achieve the goal of monetary policy through the interest rate transmission mechanism.The long-term target is constructing formal interest rate corridor,and the upper limit is SLF's rate,the lower limit is excess deposit reserve rate.The last one,combining quantitative and qualitative management,including construction of "interest rate corridor",strengthen the industry self-regulation and the construction of interest rate corridor facilities(improving the system of the central bank collateral,developing multi-level financial market and variety of financial products,etc.),and improve the financial institutions interest risk prevention capabilities.At the same time,the people's bank of China don't give up the interest rate direct management and control interest under exceptional circumstances,and ensure that regional or systemic financial crisis will not happen in China.