The Research On The Open Market Operation Of China Central Bank

The open market operation is a policy-based measure for the central bank to buy or sell aftermarket securities in the open market to increase or reduce currency supply. The central bank adjusts the banking system's level of reserve fund, controls the issuance of currency and influences currency supply and economic operation through open market operation.With the socialism market economy system restructuring in China, the domain of finance is undergoing a deep change. Especially in order that domestic banks can face all the opportunities and challenges individually after China has been the member of WTO, the operation of the Central Bank' s monetary policy has been to change gradually from administrative direct control to the indirect control based on the market, and improving the open market operation is one of the most important measures of building the monetary policy indirect control. These years, the development of China' s national debt market grounds the open market operation on fine finance, the improvement of the money market and the bonds market supplies it with sufficient space, and the undergoing reform of interest rate liberalization has accelerated the change of the open market operation' s target. In conclusion, improving the open market operation is an important issue, relative to the cooperation of financial policy and monetary policy, and the development of interest rate liberalization, bond market and finance market.Beginning with the definition of the open market operation, this thesis compares tools of indirect monetary policy, and systematically elaborates the advantage of the open market operation. Afterward it introduces the condition of the open market operation in two developed countries in which the finance system is ripe comparatively, to give good examples to the improvement of the open market operation in China. With the instruction of overseas ripe theories, our country' s open market operation came into effect in 1996. During several years' practice, the open market operation has played an important role in improving China' s monetary policy control method and developing economy healthily. However, because our country's open market operation lasts a short time, and economy is during atransferring period, the issue of bond' s scale and structure on the open market operation has some defects, and the main places for the open market operation such as bank bonds and interest rate liberalization aren' t ripe. The deficient precondition of the open market operation impacts on the open market operation' s further function. At last, it gives advice to the further development of the open market operation in our country, and look forward to its future.