The framework of monetary policy itself has to undergo a change from the previous direct methods of control of monetary aggregates to indirect methods imparting signals through the market. For such a change to be effective the monetary policy transmission process has to be strengthened through development of all financial markets, and the building of market micro-infrastructure.
On the external front, the transition from a fixed or pegged exchange rate to a market determined one itself needs careful assessment of the efficiency of the foreign exchange market, the capabilities of market players and evaluation of effects of exchange rate  BIS Review 66/2007  1  volatility.