Effect of Change in Required Reserve Ratio on Shanghai Composite Index

According to the principle of economy, the stock market will decline, if required reserve ratio (RRR) is set higher. As main macro-economic control, the RRR is one of tools which are often used. However, although the People´s Bank of China adjust the RRR so frequently in the recently, the stock market didn´t run as expectation. This paper is concerned with the phenomenon and analyzes the reason for the policy malfunction. Meanwhile, we research quantitatively with the intervention model, At last, we put forth an easible idea about how to execute the policy and reach the aim as expectation.