Cover IMF Working Papers
Monetary Instruments and their Use During the Transition From a Centrally Planned to a Market Economy
Author: Mr. Paul Louis Ceriel Hilbers
Series:
IMF Working Papers
Volume/Issue:
Volume 1993: Issue 087
Language:
English
Publication Date:
01 Nov 1993
DOI:
https://doi.org/10.5089/9781451850949.001
ISBN:
9781451850949
ISSN:
1018-5941
Pages:
34
Keywords:
WP; central bank; bank; market; credit policy; credit ceiling; central bank credit policy; market forces; central bank bank paper; credit plan; deposit base; credit demand; benchmark interest rate; credit growth rate; credit supply; commercial bank credit; selective credit control; Commercial banks; Credit; Credit ceilings; Credit controls; Bank credit; Eastern Europe
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
Download PDF (8.7 MB) Download Epub
This paper discusses different instruments of monetary policy, and in particular the choice between direct and indirect instruments. It identifies the main characteristics of a country’s financial system that should be considered in selecting monetary instruments, and analyzes how these characteristics should influence that selection in countries that are progressing from a state-controlled to a market economy. The characteristics of the financial system during the initial stage of the transition sometimes favor relatively direct instruments. At this stage market-based variants of direct instruments may combine the necessary effectiveness in reducing monetary expansion with the need to introduce and stimulate competition in the financial markets. During this stage indirect instruments can be developed and tested (“belt and braces” approach). In later stages, as experience is gained, these indirect instruments can gradually replace the more direct controls.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund