Interest Rate Deregulation: A Brief Survey of the Policy Issues and the Asian Experience
This paper examines the experiences of a group of Asian countries and the policies that they have implemented as part of their financial sector reforms, policies which have allowed greater flexibility in the adjustment of interest rates.
As the economies of Asia expand into a new and non-traditional areas of production thereby increasing the number and complexity of economic linkages, the introduction of greater price flexibility as an allocative device becomes increasingly more important. Within the financial sector, the required new role of interest rates—a key price—becomes equally critical. This new function requires redesign or elimination of controlled financial arrangements and the opening and institutionalization of more adequate mechanisms such as market-oriented mechanisms.
- Basic Considerations
- Price Policy: Interest Rates
- Interest Rate Deregulation: Experience and Policy Issues
- Lessons Learned
- A. Macroeconomic Environment and Policy
- B. Interest Rate Variability
- C. Banking Deregulation and Supervision
- Summary and Conclusions