ABSTRACT
Twenty-five years ago, the central bank in a typical developing country was subservient to its government and used, in the main, to fill a large gap between government expenditure and conventional tax revenue. It was also called upon to finance the Plan, in the same way as central banks in communist countries, through selective credit programmes implemented through various measures of financial repression. Governments pre-empted the supply of domestic saving by preserving a sheltered market for their own bills and bonds. Dirigism was the order of the day.
