The Neglected Fluidity Control Tool: Short-term National Debt
International Journal of Business and Management
In this article, we first analyze the process of the fluidity control of short-term national debt and think that the short-term national debt market with certain scale can reduce the impact of fluidity to commercial banks, then compare three tools usually used in open market operations, i.e. middle and long term national debt, central bank bill and short-term national debt and the results show that the control ability of fluidity of short-term national debt is better than middle and long term
... dle and long term national debt and central bank bill. However, the finance function of short-term national debt has ignored in China for a long time, which induces the actuality that the scale of short-term national debt is too small, and this actuality has produced a series of restriction effects to the control of fluidity. Therefore, we advice that relative departments should emphasize the finance function of short-term national debt, perfect the issuance system of short-term debt, and fully exert the control function of short-term national debt. Keywords: Short-term national debt, Fluidity, Open-market operations At present, the durative inflation occurs in the operation of China macro-economy. To control the surplus coin quantity and restrain the inflation, China central bank has adopted a series of corresponding macro-economic control measures such as expanding the issuance scale of central bank bill, enhancing the required deposit reserve ratio and enhancing the interest rate. China Ministry of Finance also issued 60 billions Yuan special national debt to retrench the fluidity in order to help the macro-economic control in 2007. However, one main operation tool to control the fluidity in western countries with market economy, the short-term national debt is not fully utilized in China macro-economic control, so it can not exert its function in the macro-economic control, which cannot but be emphasized and considered by us.