Market-Based Systems of Monetary Control in Developing Countries: Operating Procedures and Related Issues

This paper reviews issues in the development of a market-based system of monetary control in developing countries. It focuses on the appropriate sequencing of financial reform that would facilitate the transition toward a market-based system and measures required to strengthen the effectiveness of market-based operations. The paper also assesses the effects of financial reform on the demand for money function and discusses the implications for policy formulation and implementation.