The Impact Of Innovative Monetary Policy Instruments On The Price Of China's Bond Yield

Since joining the World Trade Organization,China continued to experience the double favorable balance in the international balance of payment for a long time under the guidance of the policy of foreign exchange earnings.Foreign exchange reserves increased every year,hedging foreign exchange has gradually become the main way for china to supply basic currency.Since 2013,this way has tended to be blocked with the decline in foreign exchange holdings.With the rapid development of financial markets and the emergence of non-bank financial institutions,the corporate financing structure has become more diversified.At the same time,the correlation between money supply and real economic variables such as inflation and economic growth has weakened.China's monetary policy began to shift to price based monetary policy.At this time,based on the experience of other countries'monetary innovation,China launched a series of innovative monetary policy tools in 2013,which not only enriched monetary policy tools but also enhanced the initiative of central bank to regulate the structure of the economy.With the completion of the interest rate marketization reform and the development of the financial market,the policy interest rate can not only be transmitted to the money market interest rate but also can be effectively transmitted to the bond yield.This paper studies the impact of innovative monetary policy instruments on Chinese bond yields in this context.After reviewing and summarizing the existing literature,it can be concluded that domestic scholars do not have research literature on the impact of innovative monetary policy instruments on the bond market.Therefore,this paper uses innovative monetary policy instruments and bond yield as the research object and this is a big innovation.Afterwards,this paper concludes the transmission of innovative monetary policy to bond yields according to the descriptive statistical analysis of the bond market reaction after the specific operation of the innovative monetary policy.Finally,This paper empirically analyses the impact of liquidity operation and interest rate adjustment operation of innovative monetary policy instruments on bond yield through event analysis method.This paper finds that the liquidity released by the central bank through innovative monetary policy instruments can significantly affect the yield of medium and long-term bonds,and make the yield of bonds decline significantly.In terms of credit bonds,the higher the bond grade,the more significant the impact of liquidity release by central banks through innovative monetary policy instruments.However,the central bank's interest rate operation of raising or lowering the interest rate of innovative monetary policy instruments can not significantly affect the bond yield.Therefore,this paper suggests that when using innovative monetary policy tools,the central bank should appropriately improve the transparency of the use of policy tools so that The market can make adaptive adjustments.This will improve the effectiveness of market regulation by the central bank.Secondly,the central bank should improve the collateral evaluation system and risk aversion mechanism of innovative monetary policy tools to reduce risks.Finally,the central bank should promote the development of the bond market,improve the interest rate corridor mechanism and actively adjust the interest rate of innovative monetary policy tools in order to promote the transmission effect of innovative monetary policy interest rate adjustment operation.