An Empirical Study On The Relationship Between Expected Inflation And Cash Holdings Of Commercial Banks

In recent years,with the gradual improvement of financial market management in China,the market share of financial market has been increasing,which also promotes the development of the real economy in China.Dominated by the banking industry in our country's financial environment,the movements of the banking sector plays a vital role on economic growth.Asset allocation and business strategy of commercial Banks have long been the subject of research institutions and the attention of many scholars and financial practitioners.With large variation of the domestic and international macroeconomic since 2016,the reform of supply side strength and capacity to contract is more and more big,the supply side of the curb and market demand of recovery to bring the price of commodity prices continue to rise,the macroeconomic inflation seems to be more and more near to us.At the same time,the commercial bank as an important part of financial institutions in our country,play a vital role in macroeconomic,it bear the absorb public deposits and loans to fund the demand of financial intermediary role.According to data released by the people's bank of China,by the end of 2016,issued by the commercial Banks to the real economy of the RMB loan balance accounted for 67.4%of the stock of social financing scale at the same period.Therefore,as commercial Banks,due to the change of macro environment,timely active macroeconomic fluctuations in the future,and make the adjustment on management.It can better conduct business activities and better play financial inter-mediation in society.So what happens to the cash asset management strategy of commercial Banks in the face of rising expectations of inflation?In order to solve this question,based on the commercial bank's expectations of inflation as the breakthrough point to study the macro economic environment change on cash holdings of commercial bank,the influence of the expected future price index released by the people's bank of China,simple Phillips curve model and random walk model respectively metering expected rate of inflation,and using mixed OLS method,through the study of 16 listed commercial Banks quarterly data from 2006 to 2016,the following conclusions:First,the expected rate of inflation and the level of cash holdings of commercial Banks has significantly positive correlation,expected rate of inflation is the important influencing factors of commercial bank asset allocation structure.Second,considering the nature of property rights,the expected inflation rate and the level of cash holdings of commercial Banks in the positive correlation was more marked in the state-owned commercial Banks,the expected inflation rate of a greater impact on state-owned commercial Banks.Third,in the further analysis,the expected inflation rate can affect the cash assets by affecting the demand side and supply side of the credit assets of commercial Banks.In this paper,the credit demand of commercial Banks is expected to increase when inflation is expected to rise,which in turn will have a positive impact on its cash assets.Credit supply will contract in expected inflation rate rises,and a positive impact on cash assets,the credit assets can be used as expected on the impact of inflation on cash holdings behavior a transmission channels.In this paper,an exploratory study on the relationship between expected inflation rate fluctuation and economic micro-subject behavior is studied,especially to the commercial Banks,expand the interaction research between inflation volatility and commercial bank individual behavior,increased the project of commercial bank assets and commercial Banks expected behavior research,to better understand the economic behavior of commercial Banks,offer reference for the central bank expected management policy also has important reference value,such as the government in formulating the regulation about the inflation policy,should pay more attention to the individual's expectations of inflation,individual behaviors are considered in the policy,especially the commercial Banks of corresponding behavioral decision can better achieve policy objectives.