The Ins & Outs of Chinese Monetary Policy Transmission

Silvia Miranda-Agrippino, Tsvetelina Nenova and Rey, Hélène

No 20958, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Using a novel indicator for the People’s Bank of China monetary policy stance, we estimate a policy rule that accounts for the dual nature of its price stability mandate—encompassing domestic inflation and the exchange rate—and for the evolution of its operational framework. The Ins: The domestic transmission follows textbook patterns, with exceptions due to the active management of the renminbi and the financial account. The Outs: International spillovers are powerful and affect commodity markets, global production and trade. The pass-through to foreign (US) prices is substantial. Financial spillovers are second-order, and mostly derivative from trade spillovers.

Keywords: Monetary policy; International spillovers; China (search for similar items in EconPapers)
JEL-codes: E44 E52 F33 F42 (search for similar items in EconPapers)
Date: 2025-12
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