Front Matter

Front Matter

Tomás Baliño, Charles Enoch, and William Alexander
Published Date:
July 1995
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© 1995 International Monetary Fund

Library of Congress Cataloging-in-Publication Data

The adoption of indirect instruments of monetary policy / by a Staff Team headed by William E. Alexander, Tomás J.T. Baliño, and Charles Enoch.

p. cm. — (Occasional paper, ISSN 0251-6365 ; 126)

Includes bibliographical references.

Contents: pt. 1. Issues and overview—pt. 2. Case studies.

ISBN 1-55775-489-6

1. Monetary Policy—Developing countries—Case studies.

2. Monetary policy—Case studies. I. Alexander, William E. (William Edward), 1936- . II. Baliño, Tomás J.T. III. Enoch, Charles. IV. Series: Occasional paper (International Monetary Fund) ;

no. 126.

HG1496.A36 1995




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Tables Section

The following symbols have been used throughout this paper:

  • … to indicate that data are not available;
  • — to indicate that the figure is zero or less than half the final digit shown, or that the item does not exist;
  • – between years or months (e.g., 1991–92 or January-June) to indicate the years or months covered, including the beginning and ending years or months;
  • / between years (e.g., 1991/92) to indicate a crop or fiscal (financial) year.

“Billion” means a thousand million.

Minor discrepancies between constituent figures and totals are due to rounding.

The term “country,” as used in this paper, does not in all cases refer to a territorial entity that is a state as understood by international law and practice; the term also covers some territorial entities that are not states, but for which statistical data are maintained and provided internationally on a separate and independent basis.


The introduction and refinement of indirect instruments of monetary policy have been elements of many IMF-supported programs in recent years. This paper reviews experiences in a number of countries that have adopted these instruments to obtain insights on the appropriate design of indirect instruments and to identify the supporting policies that are important for these instruments to function properly. It focuses on the transition from direct to indirect instruments and considers the speed of transition in different countries and the sequencing of the reform measures.

The paper also describes how implementing indirect instruments affects the design of monetary policy. It seeks to identify issues regarding the integration of the technical aspects of the operation of monetary policy into the design of IMF-supported programs and the exercise of surveillance as well as the role of technical assistance.

The authors would like to thank Manuel Guitián and J.B. Zulu for their encouragement and support of this project, colleagues in the Monetary and Exchange Affairs Department and other departments of the IMF, and the members of the Executive Board for valuable comments and stimulating discussion. Rozlyn Coleman and Elisa Diehl of the External Relations Department edited the paper for publication and coordinated production. The views expressed here are the sole responsibility of the authors and do not necessarily reflect the opinions of the Executive Directors of the IMF or other members of the IMF staff.

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