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Original research
THEORETICAL ISSUES CONCERNING THE IMPACT OF CENTRAL BANK INDEPENDENCE ON MONEY MARKET OPERATIONAL EFFICIENCYPages 147-156 Abstract
This article clarifies the theoretical foundations of the impact of central bank independence on money market operational efficiency. Drawing on theories of policy commitment, credibility, expectations, the delegation of monetary policy authority, and monetary-fiscal constraints, the article argues that central bank independence is not only relevant to price stability or inflation control but also directly affects the functioning of the money market. Money market operational efficiency is approached through several criteria: the ability to keep the overnight rate close to the target level, the smooth pass-through to other short-term interest rates, market liquidity, market depth, transaction costs, and resilience to shocks. The article systematizes the main channels through which central bank independence affects money market operations, including the commitment-credibility channel, expectations-management channel, instrument autonomy and operational quality channel, transparency-communication channel, fiscal-dominance-mitigation channel, and market-fragmentation-reduction channel. On this basis, the article emphasizes the need to further develop a multidimensional analytical framework, distinguish between legal and de facto independence, and incorporate boundary conditions such as fiscal discipline, exchange-rate pressure, and market depth into empirical research.
Keywords: Central Bank Independence, Money Market Operational Efficiency, Monetary Policy, Transmission Channel.
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Le Minh Tam 
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