THE IMPACT OF STATE SECURITIES PROFITABILITY ON THE EFFECTIVENESS OF MONETARY POLICY IN MOLDOVA

Victoria Cociug and Olga Timofei
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Victoria Cociug: National Institute for Economic Research Republic of Moldova, Chisinau, Republic of Moldova
Olga Timofei: National Institute for Economic Research Republic of Moldova, Chisinau, Republic of Moldova

Journal of Financial and Monetary Economics, 2016, vol. 3, issue 1, 42-47

Abstract: The recent decision of the Central Bank of Japan, regarding the adoption of a monetary policy aimed to control interest rates on government securities issued in the long term, which involves reducing the profitability of these values and increase their maturity to 24 years, determined our interest for state securities profitability impact on the effectiveness of monetary policy in the Republic of Moldova. Due to the fact that NBM has recently provided state securities with an interest that is very attractive to banks, which on the one hand, keeps the banks on the money market, on the other hand, this leads not only to lower bank interest for lending economy but even to counter this activity, which has adverse effects on the efficiency of provided monetary policy.

Keywords: state securities; state securities profitability; open-market policy; monetary policy; Taylor function; the interest rate on the state securities (search for similar items in EconPapers)
JEL-codes: E42 E43 E52 E58 (search for similar items in EconPapers)
Date: 2016
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