Research On The Effect Of Deposit Reserve Ratio Change On The Stock Price In China

Monetary policy is an important policy tool for macroeconomic regulation and control means of the central bank to take.The objective of price stability is always the importance of the central bank’s monetary policy objectives.An efficient capital market can convey the economic fundamentals of the effective information.The stock market is an important part of the capital market in the national economy.With the growing importance,it has become an important barometer on national macroeconomy.The prices of financial assets will be influenced by the adjustments of monetary policy at varying degree.The transmission mechanism and response relationship between monetary policy and the stock market has no shortage of scholars from different angles,using different methods Research.In recent years,the problem of asset bubbles continue to highlight the risk of local expanding.Sharp fluctuations in asset prices have a negative impact on the financial stability and economic growth.At the time of the implementation of monetary policy,China’s central bank also began to emphasize to maintain financial market stability.In 2017 the politburo meeting has made clear that monetary policy to curb asset-price bubbles and prevent financial risks.The thesis firstly state the basic theory of deposit reserve policy and how it works in China,after that,conduct theoretical analysis in what kind of results it may come to stock market while deposit reserve policy occure.Secondly,to use model GARCH to make empirical analysis,to apply the adjustment of deposit reserve ritio from 16th Jan to Mar.1st.2016 as the object of the study,and to chose CSI 300 Index,CSI 300 Financial Index and CSI 300 Financial Meterial Index as the study sample.The results show that the influence of the deposit reserve policy adjustment on the stock price is very significant,and there is an announcement effect.Under different development stage and market expectation,stock prices have different performances,which is not totally the same thing as theory.Stock prices from different industries vary a lot because of the different fields and capital structures.Lastly,the thesis analyze the reasons of above consequences and raise few recommendations concerning the monetary policy.