De-dollarization of credit in Peru: the role of unconventional monetary policy tools

Paul Castillo, Hugo Vega, Enrique Serrano and Carlos Burga
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Enrique Serrano: Banco Central de Reserva del Perú
Carlos Burga: Banco Central de Reserva del Perú

No 2016-002, Working Papers from Banco Central de Reserva del Perú

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 bank’s balance sheet of the complementary tools created as part of the de-dollarization program to inject domestic currency liquidity.

Keywords: Unconventional policy tools; reserve requirements; Monetary Policy; Dollarization; and Peru. (search for similar items in EconPapers)
JEL-codes: E52 E58 E61 G38 (search for similar items in EconPapers)
Date: 2016-04
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:rbp:wpaper:2016-002

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