Taming Financial Dollarization: Determinants and Effective Policies – The Case of Uruguay
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Summary:
With some of the most significant levels of financial dollarization in the Western Hemisphere, Uruguay is characterized by extensive dollarization in both deposits and loans. While traditional factors like high inflation and substantial devaluations have been associated with such outcome, the enduring nature of dollarization in Uruguay also underscores the importance of structural elements. In formulating a holistic strategy to reduce dollarization, not only should there be an enhancement of the monetary policy framework aimed at maintaining low, stable inflation, but it should also consider the calibration of prudential policies such as currency-differentiated reserve requirements and foreign-currency credit repos.
Series:
Working Paper No. 2023/244
Subject:
Currencies Dollarization Exchange rates Foreign exchange Inflation Monetary policy Money Prices Reserve requirements
Frequency:
regular
English
Publication Date:
November 24, 2023
ISBN/ISSN:
9798400258428/1018-5941
Stock No:
WPIEA2023244
Format:
Paper
Pages:
36
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