Banking. Methods of monetary regulation of the economy (the most important)

Lecture notes, cheat sheets
Free library / Directory / Lecture notes, cheat sheets

Banking. Methods of monetary regulation of the economy (the most important)

Lecture notes, cheat sheets

Table of contents (expand)

Topic 73. Methods of monetary regulation of the economy

The monetary policy of the Central Bank is aimed either at stimulating monetary emission - credit expansion, i.e., revival of the conjuncture in the face of a decline in production, or at limiting monetary emission during periods of economic upswing accompanied by "overheating" of the conjuncture - credit restriction. Achievement of these goals occurs with the help of several methods of monetary regulation:

I. Establishing upper and lower limits on the money supply in circulation. The introduction of such limits makes it possible to control the proportions of reproduction of the social product and the entrepreneurial activity of market economic structures. In the Russian Federation, a unique system of centralized regulation of monetary circulation has emerged, developed by domestic economists (Money Credit Banks lecture notes, Finance and credit, Economic theory lecture notes, History of economics textbook). This system is based on cash planning of cash turnover of market economic structures and banking authorities. 1) At the first stage, enterprises and organizations submit applications for cash (cash applications) to the servicing bank. 2) At the second stage, grassroots banks and their higher levels, based on cash requests from enterprises, draw up their cash programs, which reflect the need for cash in their area of activity. These programs are submitted to the Central Bank;

3) At the third stage, the Central Bank draws up a consolidated program for the cash turnover of grassroots banks and their provision of emission fund resources. This program is an integral part of bank refinancing;

4) At the fourth stage, local banks are informed of the Central Bank's emission resources allocated to them;

5) At the fifth stage, territorial management of cash turnover of grassroots banks is carried out with the redistribution of free funds between individual territories, regions, republics and regions. The experience of the Russian Federation has shown that drawing up cash programs allows banks to control the state of cash circulation, prepare for cash transactions and avoid delays in their issuance.

II. Establishment of fixed interest rates on loans for commercial banks. Changing interest rates either expands or contracts the money market, which has a corresponding impact on commodity-producing sectors of the national economy. As a rule, a decrease in interest rates causes an increase in business activity, a revival of production and the promotion of goods to target markets. Raising rates has the opposite economic effect. Combining interest rates allows the Central Bank to control loan prices and effectively use it for the development of the national economy. Central Bank refinancing rate.

III. Establishment of mandatory reserve standards for accounts with the Central Bank. The reserved portions of the working capital of the commercial bank make it possible to limit the issue of new money and, if necessary, provide credit assistance to banks experiencing temporary financial difficulties. The calculation of the required reserve ratio is carried out on the basis of the bank's attracted resources, i.e., cash balances in current, time and savings deposit accounts (for demand accounts 16%, for time-term accounts from 31 to 90 days 13%, over 90 days - 10%, for accounts in foreign currency - 5%).

IV. Using part of the Central Bank's emission funds to purchase government bonds and directly cover the budget deficit.

The Central Bank performs the function of cash services for the budget and becomes the cashier of the state. By conducting open market operations, the Central Bank increases (when buying securities) or decreases (when selling securities) the volume of own reserves of the CB separately and the banking system as a whole, which entails a change in the cost of the loan and, as a result, demand for money.

V. Purchase of gold and foreign currency to regulate the balance of payments and the exchange rate

The Central Bank is the main depository of the country's gold and foreign exchange reserves. The Central Bank is allowed to conduct foreign exchange interventions to influence the exchange rate and the total demand and supply of money. When the balance of payments deteriorates, the Central Bank resorts to foreign exchange interventions on the MICEX, thus maintaining the currency corridor.

Authors: Shevchuk D.A., Shevchuk V.A.

<< Back: The tax system and its structure. Tax policy

>> Forward: Essence and functions of money. Money supply. Monetary Aggregates

We recommend interesting articles Section Lecture notes, cheat sheets:

▪ Metrology, standardization and certification. Lecture notes

▪ Criminal procedure law of the Russian Federation. Crib

▪ History of domestic state and law. Crib

See other articles Section Lecture notes, cheat sheets.

Read and write useful comments on this article.

<< Back

Latest news of science and technology, new electronics:

The existence of an entropy rule for quantum entanglement has been proven 09.05.2024

Quantum mechanics continues to amaze us with its mysterious phenomena and unexpected discoveries. Recently, Bartosz Regula from the RIKEN Center for Quantum Computing and Ludovico Lamy from the University of Amsterdam presented a new discovery that concerns quantum entanglement and its relation to entropy. Quantum entanglement plays an important role in modern quantum information science and technology. However, the complexity of its structure makes understanding and managing it challenging. Regulus and Lamy's discovery shows that quantum entanglement follows an entropy rule similar to that for classical systems. This discovery opens new perspectives in the field of quantum information science and technology, deepening our understanding of quantum entanglement and its connection to thermodynamics. The results of the study indicate the possibility of reversibility of entanglement transformations, which could greatly simplify their use in various quantum technologies. Opening a new rule ... >>

Mini air conditioner Sony Reon Pocket 5 09.05.2024

Summer is a time for relaxation and travel, but often the heat can turn this time into an unbearable torment. Meet a new product from Sony - the Reon Pocket 5 mini-air conditioner, which promises to make summer more comfortable for its users. Sony has introduced a unique device - the Reon Pocket 5 mini-conditioner, which provides body cooling on hot days. With it, users can enjoy coolness anytime, anywhere by simply wearing it around their neck. This mini air conditioner is equipped with automatic adjustment of operating modes, as well as temperature and humidity sensors. Thanks to innovative technologies, Reon Pocket 5 adjusts its operation depending on the user's activity and environmental conditions. Users can easily adjust the temperature using a dedicated mobile app connected via Bluetooth. Additionally, specially designed T-shirts and shorts are available for convenience, to which a mini air conditioner can be attached. The device can oh ... >>

Energy from space for Starship 08.05.2024

Producing solar energy in space is becoming more feasible with the advent of new technologies and the development of space programs. The head of the startup Virtus Solis shared his vision of using SpaceX's Starship to create orbital power plants capable of powering the Earth. Startup Virtus Solis has unveiled an ambitious project to create orbital power plants using SpaceX's Starship. This idea could significantly change the field of solar energy production, making it more accessible and cheaper. The core of the startup's plan is to reduce the cost of launching satellites into space using Starship. This technological breakthrough is expected to make solar energy production in space more competitive with traditional energy sources. Virtual Solis plans to build large photovoltaic panels in orbit, using Starship to deliver the necessary equipment. However, one of the key challenges ... >>

Random news from the Archive

Supermassive black hole discovered 27.02.2015

Scientists from the Shanghai Astronomical Observatory have discovered an inexplicably heavy black hole at the center of a quasar that is releasing an incredible amount of energy.

Quasar SDSS J010013.021280225.8 is located at a distance of 12,8 billion light years from Earth, and it formed 875 million years after the Big Bang, when the age of the Universe was only 6% of the current one. The found quasar is not only the most massive of all known quasars in the early Universe, but also the brightest - 429 times brighter than the Sun and 40 times brighter than the Milky Way.

Scientists were surprised not so much by the record mass of the black hole, 12 billion times the mass of the Sun, as by its age, but science still has no explanations for how such a massive black hole could appear in such a short time.

Other interesting news:

▪ man on earth

▪ Crater in the desert

▪ Sports car turns into a speedboat

▪ Paintings on demand

▪ On the lift across the street

News feed of science and technology, new electronics

Interesting materials of the Free Technical Library:

▪ Modeling section of the site. Selection of articles

▪ Article by Publius Ovid Nason. Famous aphorisms

▪ article Where is it colder - at the North or at the South Pole? Detailed answer

▪ article Pilocarpus pinnate. Legends, cultivation, methods of application

▪ article Lighting off delay machine. Encyclopedia of radio electronics and electrical engineering

▪ Article Gelatin. Chemical experience

Leave your comment on this article:

All languages of this page

Home page | Library | Articles | Website map | Site Reviews