PECULIARITIES OF MANAGING SHORT-TERM MONEY MARKET RATES UNDER CONDITIONS OF STABLE LIQUIDITY SURPLUS IN THE INTERBANK LENDING MARKET

ОСОБЕННОСТИ УПРАВЛЕНИЯ КРАТКОСРОЧНЫМИ СТАВКАМИ ДЕНЕЖНОГО РЫНКА В УСЛОВИЯХ УСТОЙЧИВОГО ПРОФИЦИТА ЛИКВИДНОСТИ НА РЫНКЕ МЕЖБАНКОВСКОГО КРЕДИТОВАНИЯ

Chermen A. Gogichaev (Гогичаев Ч.А.) and Boris M. Chiliev (Чилиев Б.М.)
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Chermen A. Gogichaev (Гогичаев Ч.А.): Moscow State Institute of International Relations (University) of the Ministry of Foreign Affairs of the Russian Federation
Boris M. Chiliev (Чилиев Б.М.): Russian State University of Justice at the Supreme Court of the Russian Federation

State and Municipal Management Scholar Notes, 2023, vol. 2, 295-302

Abstract: One of the central bank’s operative objectives is control of short-term interest rates. It means that monetary authority maintains short-term interest rates within a specified corridor and provides their conformity to the policy rate level. Monetary policy tools, which provide liquidity and absorb it from the interbank lending market, insure effective interest rate steering policy. In conventional times central banks implement their monetary policy in case of insignificant deficit of reserve money preserving control over money market interest rates. After the Great Recession central banks of developed countries had to bring tools of unconventional monetary policy in operation, what resulted in unprecedented growth of supply of excess reserves and expansion of central banks’ balance sheets. Basing on experience of Federal Reserve System this article covers the issue of short-term interest rates steering within the scope of significant sustainable structural liquidity surplus on reserve money market.

Keywords: excess reserves; mandatory reserves; interbank lending market; monetary policy; interest rate paid on reserve balances; tools (search for similar items in EconPapers)
Date: 2023
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