IMF Staff Country Reports

Uruguay: Selected Issues

Publication Date:

February 1, 2008

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Summary:

This paper examines the inflation expectations, monetary policy credibility, and dollarization. Country fundamentals have explained variation in sovereign spreads, but external factors play an important role. This paper assesses the role of and prospects for bank-lending from a cyclical and structural perspectives. A model calibrated for Uruguay, a financially dollarized economy, suggests that reserves are nearing optimal prudential levels. The results of a modified Merton framework, applied to the case of the Uruguayan banking system, appear to be promising for countries without equity markets.

Series:

Country Report No. 2008/046

Subject:

Bank credit Bank deposits Banking Central banks Exchange rates Financial sector policy and analysis Foreign exchange Inflation Money Prices Reserve positions Stress testing