Voluntary and Involuntary Constraints on the Conduct of Macroeconomic Policy: An Application to the UK

Pantelopoulos, George; Watts, Martin

doi:10.1080/00213624.2021.1877040

Cited by 5 publications

(1 citation statement)

References 28 publications

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“…For example, the United States Treasury regularly moves funds from the private commercial banks into the federal government's Treasury General Account at the Federal Reserve for preventing a negative balance (Tymoigne, 2014(Tymoigne, , 2020. In previous years there was greater connection between the Consolidated Fund and the Ways and Means account in the United Kingdom (Pantelopoulos & Watts, 2021). In the case of Guyana, a developing economy, the central bank auctions Treasury bills for the Treasury.…”

Section: Discussionmentioning

confidence: 99%

Central bank securities and foreign exchange market intervention in a developing economy

Direye

Khemraj

2021

Review Development Economics

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Central bank bills (CBBs or securities) are usually adopted as tools for mopping up excess reserves and enabling the development of liquid money markets (Gevorkyan, 2015;Gray, 2006;Gray & Pongsaparn, 2015; Nyawata, 2012). While the liability-side CBBs might indeed be useful for fostering money markets, this paper demonstrates empirically that there is more to CBBs. In particular, the paper proposes that the central bank's one-sided sales of CBBs to the private sector perform like an instrument of monetary policy by stabilizing the exchange rate through easing demand pressure in the domestic foreign exchange (FX) market. The central bank sells the

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Section: Discussionmentioning

confidence: 99%