WP 2016-02: De-dollarization of credit in Peru: the role of unconventional monetary policy tools
WP 2016-02: De-dollarization of credit in Peru: the role of unconventional monetary policy tools
WP 2016-02: De-dollarization of credit in Peru: the role of unconventional monetary policy tools
N°
WP 2016-02
Title
De-dollarization of credit in Peru: the role of unconventional monetary policy tools
Author(s)
Paul Castillo, Hugo Vega and Enrique Serrano
Language
English
Date
2016/04/30
Abstract
In this paper we document and empirically evaluate the use of unconventional monetary policy tools
in Peru to reduce credit dollarization. Our empirical analysis uses the counter-factual test proposed
by Pesaran and Smith (2012) and shows that both high reserve requirements, used counter cyclically
since 2010, and the de-dollarization program put in place by the Central Reserve Bank of Peru
(BCRP) since 2013 had statistically significant effects on reducing credit dollarization in Peru. The
paper also discusses the impact on banks balance sheet of the complementary tools created as part
of the de-dollarization program to inject domestic currency liquidity.