2 thoughts on “What are the quantitative loose monetary policy?”
Myron
Quantitative and loose monetary policy is also called quantitative loose monetary policy. In general, the central bank will put the goal on a specific short -term interest rate level when setting up a monetary policy. The central bank will inject the interest rate at the target position by injecting to the inter -bank market or withdrawing funds. At this time, the central bank hopes to regulate the cost of credit. The quantitative loose currency refers to the transfer of policy concerns from controlling the amount of funds from the control of the bank system to the number of funds. The goal of monetary policy is to ensure that monetary policy is maintained in a loose environment. For this policy, "quantity" means currency supply, and "looseness" means a lot. Of course, the quantitative loose monetary policy also has its own indicators. The use of "quantitative loose" monetary policy often means giving up traditional monetary policy means, because for the central bank, they cannot control both the price of funds and the amount of funds. M quantitative refers to expanding a certain amount of currency issuance, and loosening is to reduce bank capital pressure. When the securities of banks and financial institutions were acquired by the central bank, the newly issued coins were successfully invested in the private banking system. The government bonds involved in the quantitative easing policy are not only huge, but also a long cycle. Generally speaking, the currency authorities will adopt this extreme approach if conventional tools such as interest rates are no longer effective. The quantitative easing monetary policy is commonly known as "printing banknotes". It refers to injecting excess funds into the market through a large number of money printing and purchasing government bonds or corporate bonds through a large number of money printing, which aims to reduce market interest rates and stimulate economic growth. This policy is usually adopted by the monetary authorities when the conventional monetary policy is invalidated by the economic stimulus, that is, the unconventional monetary policy implemented in the case of a liquidity trap. The quantitative easing monetary policy is a double -edged sword that implements a large amount of funds into the market into the market to help alleviate the tension of market funds and help economic recovery. The hidden dangers of inflation may cause stagnation when economic growth is stagnant. In addition, the quantitative and loose monetary policy will also lead to a sharp depreciation of the country's currency. While stimulating the exports of the country, the economic form of deteriorating related trade bodies will cause trade frictions.
The "quantization" in "quantitative looseness" means that the currency of the specified amount will be created, and "loose" refers to reducing the bank's capital pressure. The central bank uses the money created out of thin air to purchase government bonds in the open market, borrow money to accept deposit institutions, and buy assets from the bank. These can help reduce the yield of government bonds and reduce the interbank interest rate of the bank overnight. The bank has a large number of assets that can only earn extremely low interest. Fund pressure. The quantitative easing monetary policy is conducive to curbing the deterioration of currency tightening expectations to a certain extent, but its role in reducing market interest rates and promoting the recovery of the credit market is not obvious, and it may bring certain risks to the later global economic development. The first case, if the quantitative easing policy can succeed in effect, increase the supply of credit, avoid deflation, and economic recovery healthy growth. Generally speaking, stocks will win bonds. The second case, if the quantitative easing policy is implemented, resulting in excessive currency supply and reproduction of inflation, then substantive assets such as gold, commodity and real estate may perform better. The third case, if the quantitative easing policy fails to produce effects and the economy falls into shrinkage, then traditional government bonds and other fixed income tools will be more attractive. For reference.
Quantitative and loose monetary policy is also called quantitative loose monetary policy.
In general, the central bank will put the goal on a specific short -term interest rate level when setting up a monetary policy. The central bank will inject the interest rate at the target position by injecting to the inter -bank market or withdrawing funds. At this time, the central bank hopes to regulate the cost of credit. The quantitative loose currency refers to the transfer of policy concerns from controlling the amount of funds from the control of the bank system to the number of funds. The goal of monetary policy is to ensure that monetary policy is maintained in a loose environment. For this policy, "quantity" means currency supply, and "looseness" means a lot. Of course, the quantitative loose monetary policy also has its own indicators. The use of "quantitative loose" monetary policy often means giving up traditional monetary policy means, because for the central bank, they cannot control both the price of funds and the amount of funds.
M quantitative refers to expanding a certain amount of currency issuance, and loosening is to reduce bank capital pressure. When the securities of banks and financial institutions were acquired by the central bank, the newly issued coins were successfully invested in the private banking system. The government bonds involved in the quantitative easing policy are not only huge, but also a long cycle. Generally speaking, the currency authorities will adopt this extreme approach if conventional tools such as interest rates are no longer effective.
The quantitative easing monetary policy is commonly known as "printing banknotes". It refers to injecting excess funds into the market through a large number of money printing and purchasing government bonds or corporate bonds through a large number of money printing, which aims to reduce market interest rates and stimulate economic growth. This policy is usually adopted by the monetary authorities when the conventional monetary policy is invalidated by the economic stimulus, that is, the unconventional monetary policy implemented in the case of a liquidity trap.
The quantitative easing monetary policy is a double -edged sword that implements a large amount of funds into the market into the market to help alleviate the tension of market funds and help economic recovery. The hidden dangers of inflation may cause stagnation when economic growth is stagnant. In addition, the quantitative and loose monetary policy will also lead to a sharp depreciation of the country's currency. While stimulating the exports of the country, the economic form of deteriorating related trade bodies will cause trade frictions.
The "quantization" in "quantitative looseness" means that the currency of the specified amount will be created, and "loose" refers to reducing the bank's capital pressure. The central bank uses the money created out of thin air to purchase government bonds in the open market, borrow money to accept deposit institutions, and buy assets from the bank. These can help reduce the yield of government bonds and reduce the interbank interest rate of the bank overnight. The bank has a large number of assets that can only earn extremely low interest. Fund pressure.
The quantitative easing monetary policy is conducive to curbing the deterioration of currency tightening expectations to a certain extent, but its role in reducing market interest rates and promoting the recovery of the credit market is not obvious, and it may bring certain risks to the later global economic development.
The first case, if the quantitative easing policy can succeed in effect, increase the supply of credit, avoid deflation, and economic recovery healthy growth. Generally speaking, stocks will win bonds.
The second case, if the quantitative easing policy is implemented, resulting in excessive currency supply and reproduction of inflation, then substantive assets such as gold, commodity and real estate may perform better.
The third case, if the quantitative easing policy fails to produce effects and the economy falls into shrinkage, then traditional government bonds and other fixed income tools will be more attractive.
For reference.