Current monetary policy: The central bank has repeatedly raised deposit reserves and annual deposit and loan interest rates. Deposit reserve requirements hit a record high, freezing most of the funds of commercial banks. The annual loan interest rate has also been raised, obviously to control the credit scale of commercial banks. Although the central bank frequently implements monetary policy, prices are still on an upward trend, which seems to run counter to the regulatory objectives of monetary policy.

The effect of implementation: the exchange rate of RMB against the US dollar has been rising, the RMB has continued to appreciate, the trade surplus has also continued to grow, and foreign exchange reserves have repeatedly reached new highs. Our country implements a managed floating exchange rate system, and the exchange rate must be controlled within a certain range. But now the exchange rate has risen to a certain extent, and the central bank seems to be unable to control it. Looking at the GDP growth rate, it is still growing at double digits and shows no signs of slowing down. Tight monetary policy has not affected economic growth.

Supplement:

Causes that affect the effectiveness of my country’s monetary policy:

1. The shortcomings of monetary policy itself

When monetary policy exists Hysteresis. It takes a long process from the formulation and implementation of monetary policy to producing results. In developed countries with relatively complete markets, it takes six months to one year for monetary policy to be effective. In China, the credit of state-owned commercial banks is concentrated and the transmission channels of monetary policy are blocked. It is difficult for the money supply promoted by monetary policy to reach county areas.

2. Constraints of the domestic and foreign economic environment

The rise in prices is caused by the rise in food prices, and the rise in food prices in turn causes the rise in the prices of other items. Comprehensive price increases will naturally lead to wage increases and an increase in the money supply in the market, thus intensifying inflation.