Excess demand for foreign exchange on the domestic foreign exchange market invited the Bank to more than frequently intervene on market up to a point it no longer was willing to proceed with intervention for fear of depleting its foreign exchange reserves.
It was a typically monetary economics textbook illustration of what happens to the financial markets via the current account balance of payments when the fiscal position of Government is persistently out of line with economic realities. The end result was a chaos in the domestic foreign exchange market. The market ran short of foreign exchange.