More importantly, it paved the way for greater openness not only in the current account which was achieved as early as 1994, but also in the capital account by removing one of the three constraints of the impossible trinity: the fixed exchange rate. 11. Once the flexible exchange rate regime was put in place, the next step was the development of the forex market.
It was not smooth in the beginning. The market participants were as hesitant as a bird that had been released from its cage after an age and often reluctant in offering two way quotes. Besides, they also probably did not have as much regulatory freedom as a market-maker would require.