Issues in Interest Rate Management and Liberalization

Download or read book Issues in Interest Rate Management and Liberalization written by International Monetary Fund and published by International Monetary Fund. This book was released on 1990-01-01 with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper discusses the transition strategy from administratively set interest rates to market rates. Despite worldwide trends toward financial liberalization, few monetary authorities are prepared to accept as reasonable any interest rate level that is market-determined. The paper suggests some helpful indicators to assess the adequacy of interest rates. It discusses factors which contribute to a smooth liberalization process. The main conclusion is that interest rate liberalization is not synonymous with laissez-faire policies. It requires, however, the replacement of the administratively set interest rates by indirect monetary management techniques which operate through the market.