Capital Flows, Monetary Policy and FOREX Interventions in Peru

Renzo Rossini, Zenon Quispe () and Donita Rodríguez ()

No 2011-008, Working Papers from Banco Central de Reserva del Perú

Abstract: This article explains the main features of the sterilized intervention in the foreign exchange market and the use of non-conventional policy instruments as applied by the Central Reserve Bank of Peru in order to avoid credit booms or busts in a context of a partially dollarized financial system. This monetary policy framework is based on a risk management approach that includes as the main policy tool the short-term interest rate within an inflation targeting regime. This framework helped to reduce the impact of the recent global financial crisis on the Peruvian economy and allowed to rejoin the path of growth with low inflation, avoiding major disruptions from the surge of capital inflows.

Keywords: Central banks; policy framework (search for similar items in EconPapers)
JEL-codes: E52 E58 F31 F32 (search for similar items in EconPapers)
Date: 2011-05
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
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Citations: View citations in EconPapers (13)

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Chapter: Capital flows, monetary policy and forex intervention in Peru (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:rbp:wpaper:2011-008

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