Financial Sector Reforms and Monetary Policy

International Monetary Fund

No 1991/127, IMF Working Papers from International Monetary Fund

Abstract: In recent years a number of countries have undertaken far-reaching reforms of their financial sectors. Generally speaking, financial sector reforms aim at achieving greater flexibility of interest rates, an enhanced role for market forces in credit allocation, increased independence for the central bank, and a deepening of money and securities markets. Such reforms, and the developments that follow, have important implications for the design and conduct of monetary policy. This paper provides an overview of the linkages between financial sector reforms and the monetary policy framework, focusing in particular on the objectives, instruments, and operating procedures of monetary policy.

Keywords: WP; interest rate; monetary policy; market; liberalization; monetary management; interest rate volatility; money multiplier; excess reserves; credit rationing; bank interest interest rate; transmission mechanism; credibility nexus; interest rate liberalization; interest rate structure; Demand for money; Financial sector reform; Money markets; Monetary base; Monetary policy instruments; Eastern Europe; Europe (search for similar items in EconPapers)
Pages: 22
Date: 1991-12-01
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Citations: View citations in EconPapers (2)

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