Policy, Research, and External Affairs WORKING PAPERS FinancialPolicy and Systems Country Economics Department The World Bank October 1990 WPS 528 Monetary Policy Instruments for Developing Countries GerardCaprio, Jr. and PatrickHonohan Rapidly changing financial markets have led many industrial and some developing countries to change to indirect methods of monetary control. More developing countries can be expected to follow their lead. The Policy, Research, and Extemal Affairs Complex dstnbutes PRE WorkingPapers todisseminatethefindings of woik in progs an to eneourage theexchange of ideas among Bankstaff and all others interested in development issues. These papen carry thenames of the authors, reflect only their vicws. and should beusedand cited accordingly. The findings,interpretations, and conclusions ae the authors! own.They should not be atuibuted to theWorld Bank. its Board of Durectors, its management, or any of its member counties. Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized