Implementation of Monetary Policy and the Central Bank's Balance Sheet, Issues 2001-2149
This paper discusses how the choice of central banks' operating targets influences the use of their monetary policy instruments and how the latter affect the central bank's balance sheet. This is of particular interest, since the monetary conditionality in IMF-supported programs has traditionally been linked to central bank balance sheet items. Quantity targeting tends to be practiced today mostly in countries in which money markets are not yet well-developed or a monetary aggregate is used as the intermediate target. Most other central banks prefer to target a short-term interest rate, which results in day-to-day changes in balance sheet items becoming endogenous.
What people are saying - Write a review
We haven't found any reviews in the usual places.
Impact on the Central Banks Balance Sheet
1 other sections not shown
Other editions - View all
adjust balance of payments balance sheet items bank balance sheet bank reserves bank’s banking system base money central bank balance central bank credit central bank targets Claims on deposit Credit and deposit deposit auctions deposit facility deposit money banks difﬁcult excess reserves exchange rate targeting ﬁnancial programming exercise ﬁscal deﬁcits ﬂexibility foreign currency foreign exchange market Foreign exchange swaps I I I Constant IMF-supported programs impact indicator variables interest rate targeting intermediate targets international reserves liabilities liquidity management monetary aggregate monetary base targeting monetary conditionality monetary policy instruments monetary policy strategy monetary targeting money demand money market rates money multiplier NDA ceilings NIR ﬂoors nonresidents in foreign Open market operations operating target outright operations performance criteria public sector deposits quantity targeting quantity variables reﬁnancing facilities repos repurchase agreements reserve ratios Reserve requirements short-term interest rate Standing facilities suitable T T T Constant target a short-term transmission mechanism