The Researches On The Effect Of Our Exchange Cover Increasing Rapidly To Monetary Policy

During the past 1990's medium term, our exchange cover has increased super-normally with the pair of favorable balance of payments and the reform on foreign currency management system. It has improved our ability of paying, adjusting balance of payments and interfering with foreign exchange market on one hand, but on the other hand, the huge exchange cover holding with abroad finance assets form means that, a great quantity of resource has been left unused. At the same time, under the present system of sale collecting, the large amount of taking foreign currency from this has been the key factor of restricting the validity and independent of monetary policy. Under the condition, the research on the impact of our exchange cover over monetary policy has important significance. Basis on the retrospection of history in the development of our exchange cover, the article reaches that our exchange cover has assumed a fleeting and increasing trend in recent years, and it analyzes the cause of our exchange cover increasing rapidly over the past few years on the basis. Then, the article has expounded the inherent logic contact between exchange cover and monetary policy theoretically under open economy condition; it has analyzed that the impingement of the rapidly increasing exchange cover to monetary policy regulates and controls, reducing the validity and independent of monetary policy from demonstration. In conclusion, it has suggested that our country should reform foreign currency management system currently in effect, strengthened market overt business operation, urged the structure of balance of payments structure to balance, all this being put into effect in order to improving the flexibility and self's own acting of monetary policy.