Some Preliminary Evidence on China’s New Monetary Policy Tool: The Standing Lending Facility

Kerry Liu

Review of Economics, 2019, vol. 70, issue 2, 137-155

Abstract: In 2013, China’s central bank introduced the standing lending facility to manage the volatility of interbank market rates. This study is the first of its kind in the academic literature by examining the effect of this new monetary policy tool. Based on monthly data between December 2015–November 2018, the empirical results show that the standing lending facility operations can significantly reduce the volatility of overnight SHIBOR, an important policy rate in the Chinese financial markets.

Keywords: People’s Bank of China; standing lending facility; volatility; SHIBOR; policy rate (search for similar items in EconPapers)
JEL-codes: E52 E58 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1515/roe-2019-0013

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