Over the last decade, there has been substantial development in the Indian money market in terms of depth, variety of instruments and efficiency. This has enabled the Reserve Bank to change its monetary operations from direct quantity based instruments to indirect interest rate based instruments to enhance the efficiency of monetary transmission consistent with international best practice.
7  See Masayuki Nakayuki, Akira Otani, and Shigenori Shiratsuka, “Distortions in Factor Markets and Structural Adjustments in the Economy,” IMES Discussion Paper Series, No. 2004-E-4 (available on the Bank’s website). 8  BIS Review 106/2010  the structural inflation theory), but this tendency has lessened as a result of increased competition since the 1990s.