Monetary policy and trends in the money supply .. An alternative vision - Part II
The transformation of an auction the central bank as a market centralized and made him custody of the government and the conduct of its mechanisms through one of the commercial banks, will change the nature of the monetary system off and turn it from a fixed exchange or semi arrangements currency board system to a flexible exchange changed the exchange rate according to supply and demand in the the money market.
Yet in spite of that would allow the monetary authority to intervene from time to time to adjust the exchange rate and ensure the stability of the solutions according to set them.
And intervention daily in the exchange market must be completed for the benefit of emergency intervention of the Central Bank when needed to regulate the stability of the money market. *
shift open market operations to adjust the levels of liquidity as a tool of operational objectives for monetary policy and the direction of the stock will lead to a deepening of the money market and build a strong foundation for financial intermediation outside the current mechanisms that linked brokerage banking intermediation in the sale and purchase of foreign currency to overcome its operations. c -
Finally, it is possible for monetary policy to influence the levels of liquidity through the role of a reference interest rate, and will affect cash basis in the nature of the multiplier cash generator for the money supply to achieve the objectives of monetary policy stable, and will be enhanced mechanical moving cash from the operational objectives to the goals, intermediate and influential in the excess demand, but by generating interest rate equilibrium to take center stage in the stability of the internal value of money and achieving the objectives of monetary policy after it was changing a minor in light of monetary policy, the current which is the exchange rate equilibrium intermediate target is to rein in inflationary expectations binoculars to spend and sustain the overall inflation and then fold centers of stability, something that the current monetary policy was able to succeed in meeting the objectives of stability.