THE EFFECT OF CHANGES IN MONETARY POLICY INTEREST RATES ON THE BANKING SYSTEM

Abstract

The article examines the change in monetary policy interest rates on the banking system, as well as the economy of Armenia. In the article was searched: a) the shares of fiscal, monetary and currency policies in the economy and expressed it in the form of a formula, b) the change of the share of additional capital in the normative capital of banks and its impact on the banking system, economy and price stability, c) the dynamics, impact and possible consequences of changes in monetary policy instruments, d) the impact of the exchange rate change on the RA economy, and e)the reserve interest rate as a result of attracting and allocating money transfers, deposits and loans. As a result of this research has been highlight the following scientific novelties։ 1. Put into practice the EP=FP+MP+FEP formula of the financial policy proposed, thereby measuring the shares of the results of development and paralysis in the economy according to the government and the central bank, 2. Define a circle of responsibility for visible deviation of inflation and a period of border management of the latter and a road map, which will be described in terms of logical and tied sequential actions of specific actions, for the implementation of which mechanisms of responsibility will be used to paralyze the economy and cause economic shock, 3. Introduce effective securities issuance, listing and allocation mechanisms, which will make the government as the number one responsible for fiscal policy with counterbalancing financial instruments, state bonds, intervening in the management of the money supply, as a result of which, in the event of inflation, as the highest body of economic management, it will be responsible for the implementation of the Law on the State Budget of the Republic of Armenia and the RA Central Bank for the violation of Article 4 of the same law, as well as the permissible deviation approved by the RA Supreme Legislative Body, the National Assembly, as a result of the application of the wrong policy.