Study On RMB Interest Rate Conduction Mechanism

Since the1990s, in order to deal with the situation of economic globalization, the Western countries have gradually given up the money supply as a means of intermediate target of monetary policy, interest rates means being replaced by the money supply as the intermediate target of monetary policy. Monetary policy as an important means of national macro-control economic success of implementation related to the smooth running of the economy of a country or region, so the choice of monetary policy tools have to be dealt cautiously. Interest rates, by virtue of its unique advantages, are becoming the tool of choice for national regulation of the economy.After30years of China’s reform and opening up, economic development has made remarkable achievements, which cannot be separated from the State who uses its monetary policy on macro-economic adjustment. At the beginning of reform and opening up, China’s monetary policy tools take into account the intermediary role of the money supply, with sound economic system as well as the challenges of the world economy, China’s monetary policy tool, gradually expanded from a single money supply tools to currency supply, interest rates, exchange rates and other tools coexist. The role of interest rates in the macro-economic, have gradually being recognized, with the acceleration of the process of market-oriented interest rate. The more considering conduction rates, not only do help to improve the efficiency of China’s monetary policy transmission, but also do more conducive to keep up with the pace of the times, achieve rapid and stable economic growth.This paper, on the basis of long-term research scholars Keynesian theory as a guide, uses the knowledge of econometrics, each link in the transmission mechanism of interest rate policy to make the inspection, and mainly analyses from the following aspects:Interest Rate exchange rates, interest rates, GDP, interest rates and investment, interest rates and consumer. Conclusion through the analysis of economic variables on the role of interest rates is not sensitive to the interest rate transmission mechanism which is not smooth. In the existing economic system, the role of interest rates has not got a real play. And then, which is the most suitable interest rate for the later development of the Chinese economy? Later, we discusses in the existing economic situation, the optimal interest rate rules suitable for China’s development, and calculates the optimal interest rate rules for China’s economic development through the establishment of the optimal interest rate rules function as well as the data from all aspects of the investigation, value.Based on inspection of the real economy and the optimal interest rate rules established, in the conclusion, the article discusses the interest rate transmission mechanism is not smooth, and what measures should be taken to clear the country’s interest rate transmission channel to establish the most suitable for China’s economic development excellent interest rate transmission mechanism.