The exchange rate was therefore allowed to take its market-determined run while liquidity was drained from the domestic money market, interest rates were guided in a gradual upward path, and the resultant adverse consequences of the adjustment in real economic activity were accepted as essential to avoid even greater disruption later on.
Domestic financial stability had to be restored first and must now be maintained in order to raise the production capacity of the economy to higher levels on a sustainable basis. These developments over the past year again exposed the urgent need for longer-term structural economic reforms. In June 1996, the Government released a Macroeconomic Strategy for Growth, Employment and Redistribution (GEAR).