Much of the past literature on the use of monetary policy instruments by central banks in East Asia has focused on three main areas. These have been adjustments in commercial bank reserve requirements or liquidity ratios, central bank discount policy, and the use of various direct controls such as ceilings on the amount of commercial bank credit expansion. Less attention has been paid to central banks' use of money market instruments in the conduct of monetary policy. Yet, this is an important area, particularly since six of the eight major East Asian developing economies have utilized money market instruments of one type or another since the early 1980s in achieving their monetary policy objectives. This shift to greater use of money market instruments and, hence,open market operations, has been accompanied by the central banks' issuance of their own debt instruments.

This paper examines the six East Asian developing economies that have utilized money market instruments during the past decade as either a major monetary policy instrument or as a supplement to other instruments in the pursuit of monetary policy objectives. The six economies covered are the Philippines, Korea, Taiwan, Indonesia, Thailand and Hong Kong. Malaysia and Singapore are excluded as neither has made much, if any, use of money market instruments in their conduct of monetary policy.