Financial De-Dollarization: Is it for Real?

Eduardo Levy Yeyati and Alain Ize

No 2005/187, IMF Working Papers from International Monetary Fund

Abstract: De facto (unofficial) dollarization, defined as the holding by residents of assets and liabilities denominated in a foreign currency, is a policy concern in an increasing number of developing economies. This paper addresses the dollarization debate from this perspective, with the goal of setting the stage for a more detailed and focused discussion of whether de-dollarization should be a policy objective and, if so, how best to pursue this objective. We review existing theories of de facto dollarization and the extent to which they are supported by the available evidence, presents the main strategies for reform, and proposes a list of policy recommendations.

Keywords: WP; dollarization hysteresis; policy agenda; monetary management; MVP dollarization; dollar intermediation; dollarization cum fear; Dollarization; Monetary policy; Prudential policy; Currencies; Exchange rates; De-dollarization; Credit risk (search for similar items in EconPapers)
Pages: 31
Date: 2005-09-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (31)

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