Research On Required Reserve Rate Under The Change Of Monetary Policy Control Mode

Under the framework of quantitative monetary rule,the required reserve system is one of the most important monetary policy tools.However,when the monetary policy framework of quantity rule turns to that of the price rule,the role of the required reserve system is weakening.Some countries adopting to price rule,such as United Kingdom,Canada,have reduced the required reserve rate to zero.Firstly,this paper introduces the theory of intermediary goal of monetary policy,mainly including quantitative intermediary target,price intermediary target,Pole intermediary target theory.Base on this argument,the paper discusses the transformation practices of monetary policy intermediary target of countries,including Britain,Brazil,Germany,United States.Secondly,through the comparative analysis of the change of the Required Reserve rate under monetary policy framework transformation in United States,Britain,Germany and South Korea,the paper points out that,with the Financial deepening and change of monetary control mode,the decline of Required Reserve rate is a inevitable trend.In addition,the paper studies china's Required Reserve system with the transformation of monetary policy framework and points out that China's acceleration of market-oriented interest rate has a positive role to the change of China's monetary control mode.However,for China as a developing country,this paper argues that reserve policies still play an important role in the financial stability and management of foreign exchange.Moreover,this article analyze the relationship between the required reserve rate,M2 and the monetary market interest rate from the point of the empirical view and points out that during the period of 1998-2016,the partial correlation coefficient between M2 and required reserve rate is as same as that between monetary market interest rate and required reserve rate.But during the period of 2013-2016,the partial correlation coefficient between monetary market interest rate and required reserve rate is greater than that between M2 and required reserve rate.Finally,based on the analysis of the timing of the lower reserve requirements in China,this article shows that China is facing the problem of insufficient collateral when we given priority to monetary policy tools such as SLF and MLF,PLS to provide liquidity to the market.It is a better choice to decline the required reserve rate for offer liquidity to the market in the long-term.Therefore,this article suggested that the decline of Required Reserve rate is a inevitable trend not just the special case of some countries.The People's Bank Of China should reduce the required reserve rate actively,steadily and gradually.Meanwhile,under the context of internationalization of the RMB and China's capital account liberalization,The People's Bank Of China should fully exploit the multivariate functions of the required reserve system and give full play to the role of required reserve in controlling capital flow and exchange rate stability.