European Parliament Library

What is Driving Financial De-Dollarization in Latin America?, Mercedes Garcia-Escribano, Sebastian Sosa

Abstract
In the last decade, a group of Latin American countries (Bolivia, Paraguay, Peru, and Uruguay) experienced a gradual, yet sustained decline in financial dollarization. This paper documents the stylized facts and uses a standard VAR approach to examine the drivers of both deposit and credit de-dollarization. It finds that the exchange rate appreciation has been a key factor explaining deposit de-dollarization. The introduction of prudential measures to create incentives to internalize the risks of dollarization (including an active management of reserve requirement differentials), the development of a capital market in local currency, and de-dollarization of deposits have all contributed to a decline in credit dollarization. Continuing efforts on these fronts, while maintaining macroeconomic stability and strong fundamentals, would help deepening de-dollarization
Table Of Contents
Cover Page; Title Page; Copyright Page; Contents; I. Introduction; 1. Evolution of Dollarization in Selected Countries of Latin America; II. De-dollarization Trend-Stylized Facts; 2. Evolution of Financial Dollarization; 1. De-dollarization 200110; 3. Evolution of Deposit Dollarization by Maturity; 4. Evolution of Credit Dollarization by Type of Credit; 2. Peru: Decomposition of De-dollarization Into a Within and Between Components; III. Explaining De-dollarization: Empirical Approach; A. Methodology; 3. Definition of Variables in the VAR
Language
eng
Literary Form
non fiction
Note
Description based upon print version of record
Physical Description
1 online resource (40 p.)
Specific Material Designation
remote
Form Of Item
online
Isbn
9781462375905

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