Monetary Operations
Abstract
Monetary operations refer to the implementation of monetary policy – ensuring that a central bank’s policy decision has the intended impact on financial markets, and on the economy more generally. For operational purposes the day-to-day tactical target is usually to achieve a particular level of interest rates or the exchange rate; and the most efficient instruments are those which best complement the workings of a market system. This Handbook examines the various different instruments: open market operations; standing facilities; and both required reserves (which have some of the characteristics of direct controls), and voluntary or contractual reserves. Open market operations are undertaken at the initiative of the central bank, whereas standing facilities are used at the initiative of the commercial banks. Participation in both is voluntary at the level of individual banks, whereas in most countries reserve requirements are an administrative imposition on all banks - albeit one which, through averaging, allows them a degree of day-to-day flexibility. Monetary instruments are not only used to implement monetary policy; they are also used for liquidity management. This is an essential part of the central bank’s operations, in order to prevent the short-term uncertainty and price volatility which day-to-day swings in market liquidity would otherwise cause. The Handbook therefore also considers liquidity forecasting and management issues.Download Info
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.Bibliographic Info
This book is provided by Centre for Central Banking Studies, Bank of England in its series Handbooks with number 24 and published in 2006.
ISBN: 1 85730 163 3
Handle: RePEc:ccb:hbooks:24
Contact details of provider:
Postal: Threadneedle Street, London, EC2R 8AH
Phone: +44 (020) 7601 4444
Fax: +44 (020) 7601 5460
Email:
Web page: http://www.bankofengland.co.uk/education/Pages/ccbs/default.aspx
More information through EDIRC
Related research
Keywords: Monetary Operations;References
No references listed on IDEASYou can help add them by filling out this form.
Citations
Lists
This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.Statistics
Access and download statisticsCorrections
When requesting a correction, please mention this item's handle: RePEc:ccb:hbooks:24For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Maria Brady).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.