TARGET GROUP | (i) Junior to mid-level central bank officials working in monetary policy operations; and (ii) officials from central banks or ministries of finance/economy whose responsibilities require, or who have a strong interest in acquiring, a thorough understanding of monetary policy implementation.
DESCRIPTION | The implementation of monetary policy requires both well-defined goals and a consistent set of policy instruments used to achieve them. This one-week course will begin by placing central banks’ monetary policy operations in the context of broader monetary policy strategy, emphasizing the link between policy formulation and implementation, while also touching on monetary policy objectives and instruments, as well as the functioning of the monetary policy transmission mechanism. The course will then focus on the practicalities of implementing monetary policy, including the interest rate steering approach and the effects on a central bank’s balance sheet. The rest of the course will cover different aspects of monetary operations: liquidity analysis, open market operations, standing facilities, reserve requirements, and the role of foreign exchange interventions. The course will end by combining the individual aspects of monetary operations into a consistent operational framework, with examples from leading central banks, and a discussion on the unconventional monetary policy implemented by the Eurosystem.
• Principles for modern monetary policy and the implications for monetary operations
• Monetary policy implementation using an interest rate steering approach
• Monetary policy implementation from a balance sheet perspective (liquidity analysis)
• Reserve requirements
• Open market operations, auction mechanisms, repos and reverse repos
• Foreign exchange interventions
• Operational frameworks for steering short-term interest rates
• Monetary policy implementation in the Eurosystem
• Case studies