Implementing Monetary Policy in the 2000s: Operating Procedures in Asia and Beyond

Abstract

Just as monetary policy at the strategic level has undergone significant changes over the years, so has its day-to-day implementation. This paper documents the key features of 17 central banks' monetary operating frameworks as of early 2007 and discusses their major developments over the preceding decade. It finds that while some common themes and practices can be identified, there is no unique "best" way to implement monetary policy. Moreover, central banks everywhere - even in industrial economies - have continued to refine their operating frameworks and procedures and to innovate where necessary, responding to changing needs in changing times.

Keywords: Monetary policy implementation, operating procedures, policy rate, operating target, reserve requirements, standing facilities, discretionary operations, Asia-Pacific

JEL Classification: E42, E52, E58