EAST EUROPE-Mirage of Stabilisation

to develop institutions and instruments as well as an appropriate structure of market- determined rates of interest on securities. A close linkage would be established bet ween monetary policy and exchange rate policy. The Reserve Bank was quite prepared to accept that the banks' choice of asset holdings would be determined not by statutory prescriptions but by risk- reward perceptions. To complete the pic ture, guidelines had already been issued for the promotion of market-makers in the major stock exchanges and for the grant of bank advances for the purpose without any ceiling and without applying the 50 per cent margin applicable to ad vances against shares.