Prudent Monetary Policy: The Formation and Basic Experience of China s Prudent Monetary Policy

Prudent monetary policy.

It is a means of national economic policy and macroeconomic regulation and control to stabilize the value of the national currency. The fundamental reason for the stability of the value of the national currency is the growth of the amount of money issued in proportion to the country's effective economic aggregate.

A stable interest rate, a stable exchange rate, flat imports and exports, and a financial system dominated by direct investment and financing are also necessary means to stabilize the value of the national currency. Prudent monetary policy is not a policy of steady inflation and does not recognize any reasonable rate of inflation.

Therefore, the so-called month-on-month year-on-year price **, price ** is not too fast, etc., are not in line with the prudent monetary burying policy.

Prudent monetary policy refers to adjusting the policy orientation according to the signs of economic change, and when the economy shows signs of recession, the monetary policy is biased towards expansion; When the economy overheats, monetary policy tends to be tighter. In the end, it is reflected in prices, that is, to maintain the basic stability of prices. Development is the last word, and we must persist in preventing and resolving financial risks in the course of financial closure and economic development; At the same time, while emphasizing financial and economic development, it is also necessary to take into account short-term goals and medium- and long-term goals, so as to maintain long-term stability.

Monetary policy cannot only have short-term goals without medium- and long-term goals, and support short-term economic growth.

Long-term economic and financial stability cannot be sacrificed.

1. Prudent monetary policy is an economic policy and macroeconomic regulation and control means for a country to stabilize the value of its local currency. The basic principle of stabilizing the value of a country's currency is a balanced growth in the amount of money in circulation and the country's effective economic aggregate. A financial system based on direct investment and financing is also a necessary means of stabilizing the value of the local currency.

Prudent monetary policy is not a stable inflation policy, nor does it recognize any reasonable inflation rate. Therefore, the so-called year-on-year increase in the previous month is not too fast and is not in line with a prudent monetary policy.

2. A prudent monetary policy prohibits the use of monetary measures (excessive issuance of basic currency and interest rate measures), and regulates the economy and promotes economic growth through moderate escalation. The prudent monetary policy not only avoids the **** caused by the monetary policy, but also controls the non-monetary policy (such as speculative monopoly, economic structural imbalance and misleading consumption expectations) through macroeconomic control. A prudent monetary policy is a necessary prerequisite for the steady development of the economy and the continuous improvement of the people's living standards.

It is an important feature of the socially judgmental market economy.

Prudent monetary policy refers to adjusting the policy orientation according to the signs of economic change, and when the economy shows signs of recession, the monetary policy is biased towards expansion. When the economy overheats, monetary policy tends to be tighter. In the end, it is reflected in prices, that is, to maintain the basic stability of prices.

In China's monetary policy management, the first bank is to achieve a steady monetary policy operation with a relatively stable monetary growth. The PBOC also implements macroeconomic control through the bill rediscount policy, window guidance, and the issuance of warnings on certain risks.

It can be seen that the central bank no longer relies on a single policy, but is more proficient in using a series of fine-tuning means and introducing a series of measures in a forward-looking manner to achieve comprehensive policy effects. This combination of fist control will be the main means of regulation and control in the future.

The origin of the currency.

The origin of money is the result of the spontaneous emergence of commodity production and commodity exchange, as well as the development of contradictions inherent in the form of value and commodities. Money is a contract between the owner of property and the market for the right of exchange, a medium for the purchase of goods and the preservation of wealth, essentially an agreement between owners.

In ancient times, widely accepted, easy to preserve, and liquid commodities played the role of money. The ape-man used to extensively exchange stone tools, or talk about the wild use of stone tools in exchange for food and other necessities of life. Historically, livestock, furs, grains, minerals, and textiles have all been widely used as physical currency.

It wasn't until the advent of real money that real money came back in times of economic crisis, severe inflation or deflation. <>