The Study of the Relationship of Payment System with Currency and Monetary Policy

The central bank is responsible for formulating monetary policy and providing several financial services such as settlement.In recent years,along with the development of modern payment system,the relationship of payment system with currency and monetary policy has caused the pervasive attention.On the basis of previous discussions,this paper defines the basic concept and builds up the basic framework of the relationship of payment system with currency and monetary policy.It concluded that the payment system has substantive influence to currency,but the influence to monetary policy is external.The authors propose that the payment system has important external influence on monetary policy,therefore,the central bank should think on it carefully when it decides to adjust currency supply model.