عملیات مداخله آزاد

This paper explains how central bank statements, rather than open market operations, can be used to implement monetary policy. In the extreme, policy instruments can be held constant, and yet interest rates will evolve along the path desired by the central bank. We show how the recent implementation of monetary policy in New Zealand works in this way. Using announcement data from New Zealand, we find that open mouth operations lead to large changes in interest rates across all maturities, and these changes cannot be explained by open market operations. Implications are drawn for monetary policy in other jurisdictions.

Recent New Zealand monetary policy experience highlights an important channel by which a central bank can affect interest rates, which is via statements on its desired path for the short-term interest rate. New Zealand is striking because these statements – which we call open mouth operations – were exclusively used to implement monetary policy during the period we study (January 1989–September 1997), while the conventional tool of open market operations was used solely to target a level of daily settlement cash balances that was very rarely changed.1

This paper presented a model of monetary policy implementation in which investors, acting in self-interest, force interest rates to the levels desired by the monetary authority. If interest rates move out of line with those required by the monetary authority, a statement (an open mouth operation) is all that is needed to restore them. We detailed the implementation of monetary policy in New Zealand, arguing it works in this way. In the empirical section of the paper, we explored the impact of open mouth operations in New Zealand. We found that following RBNZ tightening announcements, interest rates of all maturities increase and the New Zealand dollar appreciates. We showed that these changes are not caused by simultaneous changes in open market operations. We argued that tightening announcements do not indicate a lowering in the RBNZ's inflation goal, or higher long-term inflationary outcomes. Instead, we argued that interest rates increase following tightening announcements predominantly because they signal that the RBNZ desires higher real interest rates compared to those delivered by the markets.