Abstract

In January 1987, the French monetary authorities replaced the previous mechanism of monetary policy implementation that was based on credit restrictions, quantitative allocations, and administered interest rates with a more market-oriented approach based on instruments aimed at influencing the level of interest rates and on a wider use of reserve requirements. The reforms stemmed from the authorities’ desire to allow market forces to play a greater role in the determination of interest rates and overall credit conditions, complementing the gradual trend toward financial deregulation of the preceding few years.8

instruments and Operations Procedures: Occa Paper No.70
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