Abstract: Due to changes in the economic environment and needs of monetary policy framework transformation, monetary policy's flexibility, forward-looking ability and predictability are very important to China, and research on open market operations (OMOs) can provide basis for decision making. From the perspective of practice, this paper uses regression analysis to examine OMOs' impact on money market rate (MMR). The results show that, OMOs have significant effects on MMR through a quantity path and a price path, and an operation with same direction of quantity and price is more consequential for MMR. Besides OMOs, other monetary policy tools also have impact on MMR. These results imply that the monetary policy strategy of China using variety of tools is effective, illustrated by the "heavy fist and heavy hand" operations in China. This suggests that a monetary policy aim to affect the system of MMR in the short-term MMR is rational and feasible.

Keywords: Monetary Policy; Open Market Operations; Market Effects; Money Market Rate