VI Financial Sector Reforms and Stabilization Policies
Author:
Mr. Guillermo Calvo https://isni.org/isni/0000000404811396 International Monetary Fund

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Mr. Eduardo Borensztein
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Mr. Paul R Masson
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Mr. Manmohan S. Kumar
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Abstract

This section notes the close linkages between financial sector reform and the conduct of monetary policy, including the recent introduction of indirect instruments of monetary management, and the implications of reforms for the quantitative formulation of monetary targets. It assesses the contribution that financial sector reform can make to the conduct of fiscal policy, in particular, to the financing of budget deficits. The discussion also suggests that the maintenance of current account convertibility requires prompt reform in the financial sector to encourage supply response.

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