**	Dr. Ammar is Distinguished Scholar of TDRI.

1

The econometric work that I am aware used data mostly from the 1980s, which preceded the establishment of BIBF and indicates perfect or near perfect capital mobility already during that decade, in the sense that local interest rate movements reflect international interest rate movements almost point by point. (Robinson et al. 1991:39-42; Rungsun and Phipps 1996; Warr and Bhanupong 1996:171-178). Nevertheless, the difference in the levels of interest rates has persisted and been quite high, both then and after 1993. It could be argued that this difference reflect expectations of a devaluation. Warr and Bhanupong used data on the forward premium during the 1980s to test this argument and found that the data do not support either the nominal interest-rate or the real-interest rate parity hypotheses.

2

In another provision, MPs who become ministers are expected to resign their membership in parliament. A vacancy among members elected from the party list will be filled by drawing on the next person on the list of the departing member's party, whereas a by-election has to be held to fill a vacancy among those elected from the constituencies. Clearly, it is safer for a party to retain its numerical strength in parliament by choosing its ministers from among their party-list members than to risk a by-election.