Zhou Xiaochuan: 5 Speeches to explain the new trend of monetary policy

From September 9 this year in the "Oxford China Financial Forum" speech to November 16 in the "China Global Debt Capital Markets Seminar" speech, central bank governor Zhou Xiaochuan in 69 days frequently in public on the role of central banks and monetary policy, inflation and other issues, has aroused widespread concern. Now, China's economy has largely shaken off the impact of the international financial crisis, and the overall economic situation is good, but the inflation problem is getting worse. Under such circumstances, it is an unavoidable problem that the moderately loose monetary policy implemented in response to the international financial crisis needs to be properly adjusted.　　By linking Mr Zhou's speech since September, we may be able to spot new trends in future monetary policy. September 9 Central Bank to change the weight of the multi-objective system with the change of economic conditions or to switch on the September 9, Zhou said that the Chinese central Bank now adopts a multi-objective system of monetary policy, while most other central banks adopt the inflation targeting system.　　Mr Zhou said the crisis had revealed that there were still stages that could not be achieved at the same time, and that sometimes the goals could be contradictory and complex.　　Mr Zhou believes that more research is needed, and that the central bank may consider multiple goals at different stages with different weights, changing weights or switching over time as economic conditions change. September 29 proposed to use a good money supply, interest rates and other traditional monetary policy tools September 29, Zhou said, in addition to the use of money supply, interest rates and other traditional monetary policy tools to curb excessive fluctuations in the economy, it is also necessary to introduce a number of counter-cyclical adjustment of innovative means,　　such as the establishment of counter-cyclical capital buffer system and dynamic loss preparation system.　　Subsequently, the various media on the issue of money supply analysis, and in November, the central bank deputy Governor Ma to the issue of currency issues to explain.　　October 18 proposed from the establishment of the inverse cycle of regulation and control mechanism to enhance the flexibility of macro-control October 18, Zhou said that the People's Bank of China, as the department responsible for macroeconomic regulation and maintenance of financial stability, should set up the reverse cycle regulation mechanism from the angle of guarding against systemic risk, and enhance the elasticity of macro On the night of October 19, the central bank announced that it would raise the benchmark interest rate of one-year deposit and loan 0.25% from 20th. It was the first time in three years that the central bank raised interest rates.　　Analysts believe that the central bank's interest rate hike has shown that monetary management has shifted its focus to macro-risk control, such as managing inflationary expectations, at home and abroad in a complex environment of economic and financial conditions. November 5, the "pool" theory to deal with hot money and imported inflation, Zhou Xiaochuan proposed the "Pool" theory which later aroused heated discussion. Mr Zhou suggested that there was another measure to hedge against the amount of money, if short-term investment money came in, put it in a pool without entering the entire real economy, and when it retreated, letIt flows out of the pool, which in the macroscopic sense can reduce the impact of abnormal capital flows on China's economy. But Mr Zhou did not make any further explanation of the "pool" theory.　　Ma, the central bank's deputy governor, explained in Shanghai 12th: The recent "pool" metaphor for hot money refers to a series of monetary policy portfolios, including the management of foreign exchange, the adjustment of reserve ratios, and the manipulation of monetary policies such as open market hedging.　　November 16 stressed the effectiveness of monetary policy November 16, Zhou said that the central bank will continue to do a good job of macro-control, focus on improving the pertinence and effectiveness of the policy, increasing financial support and economic structure, and steadily promote the reform of interest rate marketization, and further promote the healthy development of financial markets. Since entering the four-quarter, the central bank has taken various monetary policy instruments more frequently than the first half of the year and intensified. In addition to the day-to-day open market operations, the central bank in November, the general increase in deposit-type financial institutions deposit reserve ratio of 0.5%, October and November for some banks to take a differential deposit reserve System two times, and announced on October 19 for the first time in nearly three years to raise interest rates.　　These measures point to excessively loose liquidity and inflation.　　From the information revealed by Zhou's five speeches, it is not only a summary of the central bank's monetary policy work since one stage, but also a description of the new trend of future monetary policy. It is noteworthy that during the speech of Zhou Xiaochuan, other central bank officials have also expressed their views, the core is to pay close attention to price trends, and continue to use traditional monetary policy tools flexibly and effectively, to enhance the relevance and effectiveness of policy, while considering the introduction of new policy tools to establish a macro-prudential regulatory framework　　This information is seen by all sectors as a signal that regulators are releasing the market ahead of time before changing current monetary policy. According to Securities Daily