After the "central bank releases water" into the market, it will increase the stock funds in the market, which is conducive to activating the market, but it is likely to cause the market price to rise and push up the price level.
The manifestations of the central bank's water release include but are not limited to the following: First, reduce the interest rate of reserve deposits; The second is to increase the loan reserve and loan channels; The third is to promote bank deposits; The fourth is to issue national debt and local debt.
Extended data:
Functions of the central bank
The central bank is the "issuing bank", which is the privilege given by the state to centralize and monopolize currency issuance, and it is the only currency issuing institution in the country.
1. The concentration and monopoly of the central bank on the right to issue money is the most basic and important symbol of becoming a central bank, and it is also the basis for the central bank to play all its functions.
2. The monopoly of the central bank on the right to issue money is the basic guarantee for unifying the issuance and circulation of money and stabilizing the value of the currency.
3. Currency issuance is an important source of funds for the central bank, and it also provides financial strength for the central bank to regulate financial activities and the total amount of money and credit in the whole society and promote economic growth.
People's Daily Online-The central bank "released water" in a large amount to reverse repurchase 300 billion yuan.