The most important place in society is occupied by the monetary policy of the state. In sufficiently developed countries, it is considered as a flexible and operational supplement to the budget policy, as a tool for fine-tuning the economic situation.
Such a policy has its negative aspects, which consist in exerting only indirect influence on commercial banks, the goal is to regulate the dynamics of money supply. Therefore, it cannot force them to expand or reduce loans directly.
Helping the economy to achieve a general level of production, which is characterized by a lack of inflation and full employment, is one of the main objectives of monetary policy.
The monetary policy of the state is a set of measures for the economic regulation of credit and money circulation, which is aimed at ensuring economic growth by influencing investment activity, dynamics and inflation, and other very important macroeconomic processes.
The main goal of such a policy is to help the economy achieve a level of production that is close to full employment, as well as stable prices.
The monetary policy of the state is executed through the Central Bank, however, such a policy is determined by the government.
The tools that are used very often in monetary policy are administrative measures, the establishment of a mandatory reservation form, and the regulation of official discount rates.
Minimum reserves at the moment are part of banking assets, all banks of a commercial type must store them in the accounts of the Central Bank.
Two main functions perform minimum reserves. First, they act as collateral for the obligations of commercial banks on customer deposits (as liquid reserves). Minimum reserves, secondly, these are instruments that are used by the Central Bank in order to regulate the money supply in the country.
In the Russian Federation, the government securities market began to form in 1993. In the fall of ninety-eighth year, it was represented by domestic loan bonds, federal loan bonds, state short-term obligations.
Interest was paid on them from the federal budget, and in order to redeem bonds that were previously issued, all new tranches should be imitated.
Monetary policy of the state is closely connected with foreign economic and fiscal policies.
It should take into account the interconnection of the main macroeconomic elements - output, aggregate demand, interest rates, money supply. And also the expectations of buyers (population) and investors, the confidence of non-residents and residents in government actions. The domestic credit policy of the state will depend on the outflow and inflow of foreign currency into the country.
The effectiveness of the policy, as well as the skill of its leadership and qualifications , depends on how independent the Central Bank is as a branch of government .
The basics of the state’s monetary policy are in the system of “expensive” and “cheap” money. The policy of “expensive” money is based on the fact that the offer is limited, that is, the availability of credit and the increase in its costs are reduced to lower costs and curb inflationary pressures.
The policy of “cheap” money can provide the necessary reserves for commercial banks, that is, the ability to provide loans, but it cannot guarantee that banks can really provide loans and increase the money supply.
If this situation arises, then the actions of this policy will be ineffective. This phenomenon is called cyclic asymmetry.