Monetary Policy in Dollarized Economies

Adam Bennett, Eduardo Borensztein and Tomás Baliño

No 1999/003, IMF Occasional Papers from International Monetary Fund

Abstract: Dollarization - the holding by residents of a substantial portion of their assets in foreign-currency-denominated assets- is a common feature of developing and transition economies, and therefore typical of many countries with IMF - supported adjustment programs. This paper analyzes policy issues that arise-and various monetary strategies that may be pursued- when the monetary sector is dollarized, and it considers the implications that dollarization has for the design of IMF programs.

Keywords: OP; currency; foreign currency; FCD; asset; benefits of dollarization; dollarized economy; asset substitution; sound financial market environment; inflation stabilization; IMF staff country report; Dollarization; Currencies; Monetary base; Commercial banks; Reserve requirements; Eastern Europe (search for similar items in EconPapers)
Pages: 50
Date: 1999-03-15
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Citations: View citations in EconPapers (121)

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