Abstract: In the context of the growth of funds outstanding for foreign exchanges experiencing a phased slowdown, China has one by one brought out three innovative monetary policy tools, including standing lending facility, medium-term lending facility and pledged supplementary lending. The application of these innovative tools has reinforced the supply capacity of monetary base, improved the pertinence and flexibility of the monetary policy regulation, and is playing an active role in reducing the volatility of the market interest rate and liquidity risks. In the process of China’s interest rate marketization, the innovative tools should be more properly used to keep a neutral and moderate liquidity. Meanwhile, the transformation of innovative monetary tools from quantitative tools to pricing tools need to be quickened, so as to promote the formation of market interest rate corridor mechanism.

Key words: innovative instruments of monetary policy; standing lending facility; medium-term lending facility; interest rate corridor