Tema- Banco central de reserva.

Research work of Financial Markets

Professor: Edmundo Lizarzaburu

Students:

• Kevin Michael Donayre Espirilla
• Alvaro Jose Cuadrado Nalvarte
• Mauricio Gutierrez Loli

[pic 1]

1. Index: “The central bank and the monetary policy”
2. Introduction

   2.1.  Structure of central reserve bank of Peru.

    2.2. TOSE: reserve rate.

    3. Multiple reservoirs and the monetary supply process.

    3.1. Determinants of monetary supply: control and creation of multiple reservoirs.

    3.2. Tools of monetary policy

    3.3. Objective of monetary policy and inflation.

    4. Impact of monetary policy in the FOREX market.

5. References

2. Introduction

The Central Reserve Bank of Peru, was created on March 9, 1922 and began its activities on April 4 of that year. Subsequently, on April 28, 1931, it was transformed into the Central Reserve Bank of Peru (BCRP); It has 7 regional offices, which are located in the cities of Puno, Piura, Arequipa, Cuzco, Iquitos, Trujillo and Huancayo.

It is important to note the legal nature of the Central Bank; according to the constitution, a legal person of public law with autonomy within the framework of its organic law, has its own assets and indefinite duration for the fulfillment of its purposes. One of its main functions and purposes is to preserve monetary stability, its main functions are to regulate the currency and credit, manage international reserves, issue notes and coins, and finally provide information on national finances at different levels.

Significantly, the board is the highest authority, and this depends on the approval of regulations for its operation. Its organizational structure is clearly defined by senior management bodies, bodies of institutional control, advisory bodies and organs line; these will be detailed in subsequent research. Similarly, the provisions emanating from the Central Bank, in full exercise of their duties, are mandatory and compliance must be abided by members of the financial system.

Moreover, the research aims to explain both the main functions of the Central Bank, mentioned above, as well as determining the degree of reach and control of the money supply in Peru, international reserves, foreign exchange regulation; and finally explain how his functions for implementation of monetary policy, affect the currency market.

The BCRP should implement its monetary policy considering the effects of dollarization on macroeconomic development, which they achieve by establishing the reference interest rate, particularly on the transmission mechanism of monetary policy. We will briefly describe the main channels through which dollarization may affect the actions of monetary policy.

Finally, interventions in the FOREX market by the BCR are basically aimed to reduce the volatility of the exchange rate but without signaling or committing to a certain level of the exchange rate. A predictable exchange rate would in practice transform the exchange rate system into a form of a pegged exchange type, and with that ensure success of one-sided bets by speculators, and thus transforming the intervention into a fruitless effort. In subsequent, dynamics between the currency market and the effects of monetary policy, which is executed by the system it was explained.

...