By 1995, over 95 percent of prices have been fully liberalized. Liberalization of legal conditions has enabled free entry into nearly all business activities, resulting in a more efficient allocation of labor and capital. The emerging capital markets have been established according to the standards of developed market economies. Virtually all restrictions on foreign trade have been lifted. In October 1995, the Czech crown became convertible according to Article VIII of the IMF Agreement.
Convertibility applies to all current account and some capital account operations.
At the beginning of the reforms, legislation covering the principle needs of a market economy was established. Since then, legislation is continuing to be rewritten in accordance with the requirements for accession to the European Union and OECD standards. To implement and enforce the new legislation, the government s institutional framework has changed substantially. Within the Ministry of Finance, it is the tax and customs administration, along with the regulatory bodies for the insurance and financial markets, which have been strengthened. In just five years, the Czech Republic has been transformed from one of the most centralized of the former communist countries into one of the most market-orientated.