The Motivation and Monetary Effects of China's Reserve Requirement Policy
研究了中国央行频繁使用准备金率替代公开市场操作来回收流动性的动机，并分析了准备金率变动对货币供应量和商业银行超额准备金率的影响。
The Chinese central bank(PBC) relied more on reserve requirement ratio as a policy tool to withdraw domestic liquidity surpluses,as a cheaper substitute for open-market operation instruments in this period of rapid foreign exchange accumulation.According to our research,(1) Assuming RRR unchanged since 2000, the growth rate of M2 would be 36.2 percent on September 2011,23.2 percentage point higher than the actual number.If PBC wanted to keep the same M2 growth,the amount of monetary base needed was 12.5 trillion RMB,8.7 trillion lower than the actual,which would be a real challenge for open market operations.(2) In the short run,commercial banks will reduce the excess reserve ratio to cope with the RRR hiking.However, commercial banks will adjust the excess reserve ratio to an optimal level via asset management in the long run. (3) Presently,deceasing RRR is conducive for commercial banks' excess reserve ratio to reach the optimal level. But it will take some time to reflect the effect.