MY SCRIPT:

1. LIQUIDITY RESERVE REQUIREMENTS

The only difference between CRR and SLR are CRR are limited to cash reserves only. THEN
READ THE WORD FILE #4 LRR.

2. LENDING RATES
Lending rate or interest rate is the amount charged by lenders for a certain period as a
percentage of the amount lent or deposited. Interest/ Lending rates are the cost of
borrowing money and represent what creditors earn for lending money. THEN
READ THE WORD FILE # 5
“The Fed lowers interest rates in order to stimulate economic growth, as lower
financing costs can encourage borrowing and investing. However,
when rates are too low, they can spur excessive growth of credits and
subsequent inflation, reducing purchasing power and undermining the
sustainability of the economic expansion.”

3. CREDIT POLICY
READ REKTA THE WORD FILE #6 (Supporting)

 Credit terms. It covers the normal payment terms that the company will allow to its
customers, and the circumstances under which alternative terms are allowed. This section
may include early payment discounts . Alternatively, it may include requirements for
payments in advance, which is especially common for custom orders.

 Credit limits. It states the amount of credit that will be allowed to customers, given
certain criteria. For example, a new customer may automatically be granted a $500 credit
limit , while a payment history must be proven and financial statements issued before credit
can exceed $5,000.

 Information requirements. It identifies the information that must be received before

credit will be granted, such as a credit application , personal guarantee, credit report , and
financial statements.

 Collection progression. It states the order in which the collection staff will engage in
collection activities, perhaps beginning with notification calls or dunning letters , and
 progressing through collection agencies and legal action.
https://www.accountingtools.com/articles/2018/1/20/credit-policy

 https://www.levelset.com/blog/what-is-a-credit-policy-and-how-do-i-make-a-good-
one/#:~:text=Simply%20put%2C%20a%20credit%20policy,are%20extended
%20credit%20and%20billed

Green credit Policy Currently, the most notable credit policy of China is Green Credit
Policy. It was introduced in 2007, encouraging banks to lend more to climate-friendly
projects and less to highly polluting ones.
> Via policies and management measures, the initiative essentially restricts bank loans
to projects that are harmful for the environment and increases loans to projects that
benefit the environment.

4. INFLATION TARGETING
READ REKTA #15

Inflation targeting is a central banking policy that revolves around adjusting monetary
policy to achieve a specified annual rate of inflation. The principle of inflation targeting is
based on the belief that long-term economic growth is best achieved by maintaining
price stability, and price stability is achieved by controlling inflation.
As a strategy, inflation targeting views the primary goal of the central bank as
maintaining price stability. All of the tools of monetary policy that a central bank has,
including open market operations and discount lending, can be employed in a general
strategy of inflation targeting.
“China's economy, which was the first to be hit by the coronavirus pandemic and early
to recover from its impact,”

5. PRICE LEVEL TARGETING

READ REKTA # 16

“Price-level targeting is, theoretically, more effective than inflation targeting

because the target is more precise. But it is riskier, given the consequences of
missing the target.”
LPrice level targeting is a technique in monetary policy, where the central bank
increases or decreases the supply of money and credit in the economy in order to
achieve a specified price level. 

The consumer price index (CPI) measures changes in the prices of goods and services
consumed by households. Such changes affect the real purchasing power of
consumers’ incomes and their welfare.

How is China’s consumer inflation measured?

It is most often measured by the consumer price index (CPI), which tracks the prices
people pay for a “basket” of goods and services. CPI is a key way to measure changes
in purchasing trends and to track inflation.