## 7. Credit and Deposits in Domestic Currency and Inflation Response to a Policy Shock

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---

### Introduction
- Objective: empirically study monetary policy transmission in four small open economies under inflation targeting (IT) — Chile, New Zealand, Peru, and Uruguay — focusing on how degree of dollarization may explain cross-country differences in transmission.
- Two-stage approach:
  - Stage 1: evaluate pass through from the policy rate to key interest rates (money market, deposit, lending).
  - Stage 2: use vector autoregressive (VAR) models to evaluate how changes in the money market rate affect output and inflation.
- Additional analysis: rolling VARs to assess whether credit depth and dollarization levels help explain inflation response to policy rate innovations.

### Key stylized facts
- Dollarization:
  - Chile and New Zealand: almost all credit and deposits denominated in local currency.
  - Peru and Uruguay: large shares of foreign-currency denominated credits and deposits, though on a downward trend.
- Volatility and inflation performance:
  - Uruguay had higher output volatility relative to other countries.
  - Uruguay’s CPI inflation remained at a higher level relative to the other three countries during 2010.
  - Policy rates tracked inflation closely in all four countries.

### Interest rate pass through (empirical OLS evidence)
- Short-run OLS regression: Δ(deposit or lending rate) = ci + αi·Δ(money market rate) + εit. αi is the short-run pass-through.
- Pass-through from the money market rate to the deposit rate (Table 3):
  - Chile: c = 0.00; α = 0.78; Pass-through = 0.78; Cross-correlation = 0.87; R-squared = 0.76; Sample = 1999M9–2010M11
  - New Zealand: c = 0.01; α = 0.67; Pass-through = 0.50; Cross-correlation = 0.71; R-squared = 0.50; Sample = 1999M4–2010M10
  - Peru: c = -0.01; α = 0.32; Pass-through = 0.32; Cross-correlation = 0.75; R-squared = 0.57; Sample = 2003M9–2010M10
  - Uruguay: c = 0.03; α = 0.20; Pass-through = 0.20; Cross-correlation = 0.30; R-squared = 0.91; Sample = 2007M9–2010M11
- Pass-through from the money market rate to the lending rate (Table 4):
  - Chile: c = -0.01; α = 0.67; Pass-through = 0.67; Cross-correlation = 0.72; R-squared = 0.51; Sample = 1999M9–2010M11
  - New Zealand: c = 0.03; α = 0.62; Pass-through = 0.62; Cross-correlation = 0.84; R-squared = 0.70; Sample = 1999M4–2010M10
  - Peru: c = -0.03; α = 0.19; Pass-through = 0.19; Cross-correlation = 0.13; R-squared = 0.02; Sample = 2003M9–2010M10
  - Uruguay: c = 0.03; α = 0.10; Pass-through = 0.10; Cross-correlation = 0.32; R-squared = 0.10; Sample = 2007M9–2010M10
- Interpretation:
  - Strong and significant pass through in Chile and New Zealand to both deposit and lending rates.
  - Weaker pass through in Peru and Uruguay, with somewhat larger impact on deposit than lending rates.
  - Interbank rate tracks policy rate almost immediately and completely in all countries except a Uruguay episode in Oct–Nov 2008.

### Empirical VAR results: transmission to output and inflation
- Benchmark monthly VAR specification (two lags) with endogenous vector Yt = [Rt, IPt, πt - πt^w]′ where:
  - Rt = money market rate
  - IPt = y-o-y change of an index of economic activity
  - πt - πt^w = domestic-minus-world headline inflation (y-o-y)
- Exogenous variables Xt = [FFt, WCPIt, IPt^us]′ where:
  - FFt = U.S. Federal Funds rate
  - WCPIt = y-o-y world commodity price index change
  - IPt^us = U.S. industrial production index gap (logs)
- Impulse-response summary to a 100 basis points increase in the money market rate (contractionary shock):
  - New Zealand: significant and persistent contraction in growth rate of output and inflation.
  - Chile: negative impact on output materializes after about three months and is persistent; inflation effect is more immediate and persistent.
  - Peru: interest rate hike leads to a short-run increase in economic activity for about 5 months; effect on inflation is counter-intuitive (short-run increase).
  - Uruguay: slightly positive yet not very significant effect on activity; effect on inflation is rather insignificant.
- Balance-sheet channel explanation for Peru and Uruguay:
  - Mechanism: interest rate hike → exchange rate appreciation → improved balance-sheets of foreign-currency–indebted agents → indirect positive effect on aggregate demand that may outweigh direct contraction from interest rate channel.

### Exchange rate channel (alternate VAR with NEER)
- VAR endogenous vector Yt = [neer_t, IPt, Rt, πt]′ where neer_t = y-o-y NEER change.
- Impulse-response to a 10 percent NEER depreciation on CPI inflation:
  - Peru: 10 percent depreciation raises CPI inflation up to 1.8 percent five months after the shock; effect is persistent.
  - Uruguay: CPI inflation rises about 1.2 percent after 3 months and remains positive for a long period.
  - Chile and New Zealand: NEER depreciation has a small and short-lived effect on inflation.
- Interpretation: larger exchange rate pass through in Peru and Uruguay consistent with higher dollarization.

### Role of financial factors (credit depth and dollarization)
- Financial system indicators (Table 5, in percent of GDP):
  - Chile: Total Deposits = 49.5; Credit to Private Sector = 74.3; Stock Market Capitalization = 154.2; International Debt Issues = 6.3
  - New Zealand: Total Deposits = 82.2; Credit to Private Sector = 142.8; Stock Market Capitalization = 29.3; International Debt Issues = 7.4
  - Peru: Total Deposits = 32.3; Credit to Private Sector = 24.5; Stock Market Capitalization = 67.4; International Debt Issues = 10.2
  - Uruguay: Total Deposits = 44.8; Credit to Private Sector = 20.9; Stock Market Capitalization = 0.4; International Debt Issues = 21.9
- Recursive (rolling) VAR exercises:
  - Purpose: examine how the three-month response of inflation to a 100 basis points money market rate increase varies with credit-to-GDP ratio, and with dollarization measures (local currency credit as percent of total credit; local currency deposits as percent of total deposits).
  - Credit-to-output regression lines (scatter/OLS reported):
    - Chile: y = 0.0024x - 0.2347; R² = 0.3435
    - Peru: y = -0.0595x + 1.9309; R² = 0.4677
    - Uruguay: y = -0.0011x + 0.0466; R² = 0.0028
    - New Zealand: y = 0.0225x - 3.7031; R² = 0.8232
  - De-dollarization regressions (three-month inflation response vs domestic-currency credit or deposits as percent of totals):
    - Peru: Inflation response vs Credit in Domestic Currency (as percent of Total Credit): y = -0.0302x + 1.991; R² = 0.3791
    - Uruguay: Inflation response vs Credit in Domestic Currency (as percent of Total Credit): y = -0.0036x + 0.1924; R² = 0.0348
    - Peru: Inflation response vs Deposits in Domestic Currency (as percent of Total Deposits): y = -0.0328x + 2.446; R² = 0.3687
    - Uruguay: Inflation response vs Deposits in Domestic Currency (as percent of Total Deposits): y = -0.0111x + 0.246; R² = 0.2138
- Interpretation:
  - Credit-to-output ratio does not provide conclusive cross-country evidence on strength of transmission.
  - For Peru and Uruguay, reductions in dollarization (higher shares of credit and deposits in domestic currency) are associated with improved effectiveness of monetary policy in curbing inflationary pressures.
  - Uruguay results are weaker due to shorter sample; further research with more data is recommended.

### Concluding remarks (policy-relevant findings)
- Heterogeneity in transmission:
  - Chile and New Zealand: strong traditional interest rate channel; significant pass through from policy rate to deposit and lending rates; contractionary monetary shocks reduce output and inflation.
  - Peru and Uruguay: weaker interest rate channel; exchange rate channel plays a more substantial role in controlling inflation due to higher dollarization and larger exchange rate pass through.
- Implications:
  - As Peru and Uruguay de-dollarize, the relevance of the exchange rate channel is likely to decrease over time.
  - Strengthening other channels of transmission (e.g., development of domestic credit markets, deeper capital markets) may be necessary to curb inflationary pressures more effectively over the medium term.
- Open points:
  - No conclusive evidence that greater credit depth uniformly strengthens interest rate transmission across countries.
  - Further research recommended, particularly for Uruguay where data limitations constrain inference.

*Source: IMF staff estimations and country authorities as presented in the chapter "7. Credit and Deposits in Domestic Currency and Inflation Response to a Policy Shock."*

### References .............................................................................................................

### _wp1187 - References .............................................................................................................

### Section listings
- References ................................................................................................................................20
- Annex 1. ...................................................................................................................................21

### Tables
- 1. Volatility of Selected Variables .....................................................................................6
- 2. Inflation and Policy Rate ...............................................................................................8
- 3. Pass-Through from the Money Market Rate to the Deposit Rate ................................10
- 4. Pass-Through from the Money Market Rate to the Lending Rate ...............................10
- 5. Financial System Indicators .........................................................................................16

### Figures
- 1. Selected Macroeconomic Indicators ..............................................................................5
- 2. Actual Inflacion, Expected Inflation, Target Bands and Policy Rates ..........................7
- 3. Local-Currency Deposit and Lending Rates, and Policy Rate ......................................9
- 4. Impulse Response Functions to a 100 Basis Points Increase in the Policy Rate .........13
- 5. Impulse Response Functions to a 10 Percent NEER Depreciation ..............................14
- 6. Credit to the Private Sector and Inflation Response to a Policy Shock .......................17

*Source: _wp1187 - References .............................................................................................................*

### 7. Credit and Deposits in Domestic Currency and Inflation Response

### 7. Credit and Deposits in Domestic Currency and Inflation Response to a Policy Shock

### Introduction
- Objective: empirically study monetary policy transmission in four small open economies under inflation targeting (IT) — Chile, New Zealand, Peru, and Uruguay — focusing on how degree of dollarization may explain cross-country differences in transmission.
- Two-stage approach:
  - Stage 1: evaluate pass through from the policy rate to key interest rates (money market, deposit, lending).
  - Stage 2: use vector autoregressive (VAR) models to evaluate how changes in the money market rate affect output and inflation.
- Additional analysis: rolling VARs to assess whether credit depth and dollarization levels help explain inflation response to policy rate innovations.

### Key stylized facts
- Dollarization:
  - Chile and New Zealand: almost all credit and deposits denominated in local currency.
  - Peru and Uruguay: large shares of foreign-currency denominated credits and deposits, though on a downward trend.
- Volatility and inflation performance (selected observations from text and tables):
  - Uruguay had higher output volatility relative to other countries.
  - Uruguay’s CPI inflation remained at a higher level relative to the other three countries during 2010.
  - Policy rates tracked inflation closely in all four countries.

### Interest rate pass through (empirical OLS evidence)
- Short-run OLS regression: Δ(deposit or lending rate) = ci + αi·Δ(money market rate) + εit. αi is the short-run pass-through.
- Pass-through from the money market rate to the deposit rate (Table 3):
  - Chile: c = 0.00, α = 0.78, Pass-through = 0.78, Cross-correlation = 0.87, R-squared = 0.76, Sample = 1999M9–2010M11
  - New Zealand: c = 0.01, α = 0.67, Pass-through = 0.50, Cross-correlation = 0.71, R-squared = 0.50, Sample = 1999M4–2010M10
  - Peru: c = -0.01, α = 0.32, Pass-through = 0.32, Cross-correlation = 0.75, R-squared = 0.57, Sample = 2003M9–2010M10
  - Uruguay: c = 0.03, α = 0.20, Pass-through = 0.20, Cross-correlation = 0.30, R-squared = 0.91, Sample = 2007M9–2010M11
- Pass-through from the money market rate to the lending rate (Table 4):
  - Chile: c = -0.01, α = 0.67, Pass-through = 0.67, Cross-correlation = 0.72, R-squared = 0.51, Sample = 1999M9–2010M11
  - New Zealand: c = 0.03, α = 0.62, Pass-through = 0.62, Cross-correlation = 0.84, R-squared = 0.70, Sample = 1999M4–2010M10
  - Peru: c = -0.03, α = 0.19, Pass-through = 0.19, Cross-correlation = 0.13, R-squared = 0.02, Sample = 2003M9–2010M10
  - Uruguay: c = 0.03, α = 0.10, Pass-through = 0.10, Cross-correlation = 0.32, R-squared = 0.10, Sample = 2007M9–2010M10
- Interpretation:
  - Strong and significant pass through in Chile and New Zealand to both deposit and lending rates.
  - Weaker pass through in Peru and Uruguay, with somewhat larger impact on deposit than lending rates.
  - Interbank rate tracks policy rate almost immediately and completely in all countries except a Uruguay episode in Oct–Nov 2008.

### Empirical VAR results: transmission to output and inflation
- Benchmark monthly VAR specification (two lags) with endogenous vector Yt = [Rt, IPt, πt - πt^w]′ where:
  - Rt = money market rate
  - IPt = y-o-y change of an index of economic activity
  - πt - πt^w = domestic-minus-world headline inflation (y-o-y)
- Exogenous variables Xt = [FFt, WCPIt, IPt^us]′ where:
  - FFt = U.S. Federal Funds rate
  - WCPIt = y-o-y world commodity price index change
  - IPt^us = U.S. industrial production index gap (logs)
- Impulse-response summary to a 100 basis points increase in the money market rate (contractionary shock):
  - New Zealand: significant and persistent contraction in growth rate of output and inflation.
  - Chile: negative impact on output materializes after about three months and is persistent; inflation effect is more immediate and persistent.
  - Peru: interest rate hike leads to a short-run increase in economic activity for about 5 months; effect on inflation is counter-intuitive (short-run increase).
  - Uruguay: slightly positive yet not very significant effect on activity; effect on inflation is rather insignificant.
- Balance-sheet channel explanation for Peru and Uruguay: interest rate hike → exchange rate appreciation → improved balance-sheets of foreign-currency–indebted agents → indirect positive effect on aggregate demand that may outweigh direct contraction from interest rate channel.

### Exchange rate channel (alternate VAR with NEER)
- VAR endogenous vector Yt = [neer_t, IPt, Rt, πt]′ where neer_t = y-o-y NEER change.
- Impulse-response to a 10 percent NEER depreciation (exchange rate shock) on CPI inflation:
  - Peru: 10 percent depreciation raises CPI inflation up to 1.8 percent five months after the shock; effect is persistent.
  - Uruguay: CPI inflation rises about 1.2 percent after 3 months and remains positive for a long period.
  - Chile and New Zealand: NEER depreciation has a small and short-lived effect on inflation.
- Interpretation: larger exchange rate pass through in Peru and Uruguay consistent with higher dollarization.

### Role of financial factors (credit depth and dollarization)
- Financial system indicators (Table 5, in percent of GDP 4/):
  - Chile: Total Deposits = 49.5; Credit to Private Sector = 74.3; Stock Market Capitalization = 154.2; International Debt Issues = 6.3
  - New Zealand: Total Deposits = 82.2; Credit to Private Sector = 142.8; Stock Market Capitalization = 29.3; International Debt Issues = 7.4
  - Peru: Total Deposits = 32.3; Credit to Private Sector = 24.5; Stock Market Capitalization = 67.4; International Debt Issues = 10.2
  - Uruguay: Total Deposits = 44.8; Credit to Private Sector = 20.9; Stock Market Capitalization = 0.4; International Debt Issues = 21.9
- Recursive (rolling) VAR exercises:
  - Purpose: examine how the three-month response of inflation to a 100 basis points money market rate increase varies with credit-to-GDP ratio, and with dollarization measures (local currency credit as percent of total credit; local currency deposits as percent of total deposits).
  - Credit-to-output findings (scatter/OLS lines reported in figures):
    - Chile: y = 0.0024x - 0.2347, R² = 0.3435
    - Peru: y = -0.0595x + 1.9309, R² = 0.4677
    - Uruguay: y = -0.0011x + 0.0466, R² = 0.0028
    - New Zealand: y = 0.0225x - 3.7031, R² = 0.8232
  - De-dollarization exercises (three-month inflation response vs measures of domestic-currency credit and deposits — scatter/OLS lines reported):
    - Peru: Inflation response vs Credit in Domestic Currency (as percent of Total Credit): y = -0.0302x + 1.991, R² = 0.3791
    - Uruguay: Inflation response vs Credit in Domestic Currency (as percent of Total Credit): y = -0.0036x + 0.1924, R² = 0.0348
    - Peru: Inflation response vs Deposits in Domestic Currency (as percent of Total Deposits): y = -0.0328x + 2.446, R² = 0.3687
    - Uruguay: Inflation response vs Deposits in Domestic Currency (as percent of Total Deposits): y = -0.0111x + 0.246, R² = 0.2138
- Interpretation:
  - Credit-to-output ratio does not provide conclusive cross-country evidence on strength of transmission.
  - For Peru and Uruguay, results suggest that reductions in dollarization (higher shares of credit and deposits in domestic currency) are associated with improved effectiveness of monetary policy in curbing inflationary pressures.
  - Uruguay results are weaker due to shorter sample; further research with more data is recommended.

### Concluding remarks (policy-relevant findings)
- Heterogeneity in transmission:
  - Chile and New Zealand: strong traditional interest rate channel; significant pass through from policy rate to deposit and lending rates; contractionary monetary shocks reduce output and inflation.
  - Peru and Uruguay: weaker interest rate channel; exchange rate channel plays a more substantial role in controlling inflation due to higher dollarization and larger exchange rate pass through.
- Implications:
  - As Peru and Uruguay de-dollarize, the relevance of the exchange rate channel is likely to decrease over time.
  - Strengthening other channels of transmission (e.g., development of domestic credit markets, deeper capital markets) may be necessary to curb inflationary pressures more effectively over the medium term.
- Open points:
  - No conclusive evidence that greater credit depth uniformly strengthens interest rate transmission across countries.
  - Further research recommended, particularly for Uruguay where data limitations constrain inference.

*Source: IMF staff estimations and country authorities as presented in the chapter "7. Credit and Deposits in Domestic Currency and Inflation Response to a Policy Shock."*

### REFERENCES

### _wp1187 - REFERENCES

### References
- García-Escribano, Mercedes and S. Sosa, 2011. “What is Driving Financial De-dollarization in Latin America?” IMF Working Paper No. 11/10 (Washington: International Monetary Fund).
- Kim, Soyoung and N. Roubini, 2000, “Exchange Rate Anomalies in the Industrial Countries: A Solution with a Structural VAR Approach,” Journal of Monetary Economics, 45, pp. 561–586.
- Leiderman, Leonardo, R. Maino and E. Parrado, 2006. “Inflation Targeting in Dollarized Economies”, IMF Working Paper No. 06/157 (Washington: International Monetary Fund).
- Mishra, Prachi, P. Montiel and A. Spilimbergo, 2010, “Monetary Transmission in Low Income Countries”, IMF Working Paper No. 10/223 (Washington: International Monetary Fund).
- Mishkin, Frederic, 1996, “The Channels of Monetary Transmission: Lessons for Monetary Policy”, NBER Working Paper No. 5464.
- Peersman, Gert and F. Smets, 2001, “The Monetary Transmission Mechanism in the Euro Area: More Evidence from VAR Analysis”, European Central Bank, Working Paper No. 91.
- Rossini, Renzo and M. Vega, 2007, “El mecanismo de transmisión de la política monetaria en un entorno de dolarización financiera: El caso del Perú entre 1996 y 2006”, Banco Central de Reserva del Perú, Working Paper No. 17.
- Saizar, Ana Carolina and N. Chalk. 2008, “Is Monetary Policy Effective when Credit is Low?”, IMF Working Paper No. 08/288 (Washington: International Monetary Fund).
- Sims, Christopher, 1992, “Interpreting the Macroeconomic Time Series Facts”, European Economic Review, 36, pp. 975-1011.

### Annex 1. Table A1. Data sources
- Chile
  - CPI Inflation — Cons um er Price Index — Jan-2005 to Nov-2010 — Monthly — National Bureau of Statis tics — II, III and IV
  - Credit to the Private Sector — Colocaciones domésticas en Pesos — Sep-1999 to Nov-2010 — Monthly — Central Bank of Chile — V
  - Deposit Rate — Deposit Rate — Sep-1999 to Nov-2010 — Monthly — International Financial Statistics, IMF — II and III
  - Expected Inflation — Inflation Expectations, 12-months ahead — Jan-2005 to Nov-2010 — Monthly — Central Bank of Chile — II and III
  - Foreign Reserves — Reserve Assets — Jan-2005 to Nov-2010 — Monthly — Central Bank of Chile — II
  - Lending Rate — Lending Rate — Sep-1999 to Nov-2010 — Monthly — International Financial Statistics, IMF — II and III
  - Money Market Rate — Tasa de Interés Promedio Interbancaria a 1 día — Sep-1999 to Nov-2010 — Monthly — Central Bank of Chile — II and III
  - NER — Nominal Exchange Rate, Local Currency per US$ — Jan-2005 to Nov-2010 — Monthly — Central Bank of Chile — II
  - Nominal GDP — Gross Domestic Product in local currency — 1995-2010 — Annual — Central Bank of Chile — II and V
  - Openess — Export plus Imports over GDP — 1995-2009 — Annual — Central Bank of Chile — II
  - Output — Monthly Indicator of Economic Activity, IMACEC — Jan-2005 to Nov-2010 — Monthly — Central Bank of Chile — II
  - Policy Rate — Monetary Policy Rate — Sep-1999 to Nov-2010 — Monthly — Central Bank of Chile — II and III
  - REER — Real Effective Exchange Rate, index 2005=100 — Jan-2005 to Sep-2010 — Monthly — International Financial Statistics, IMF — II
  - Target Bands — Inflation Target bands — Sep-1999 to Nov-2010 — Monthly — Central Bank of Chile — II

- New Zealand
  - CPI Inflation — Cons um er Price Index — Jan-2005 to Nov-2010 — Monthly — Reserve Bank of New Zealand — II, III and IV
  - Credit to the Private Sector — Claims on Private Sector — April-1999 to Nov-2010 — Monthly — International Financial Statistics, IMF — V
  - Deposit Rate — Deposit Rate — April-1999 to Nov-2010 — Monthly — International Financial Statistics, IMF — II and III
  - Expected Inflation — Inflation Expectations, 12-months ahead — Jan-2005 to Nov-2010 — Monthly — Reserve Bank of New Zealand — II and III
  - Foreign Reserves — Total Reserves minus Gold — Jan-2005 to Nov-2010 — Monthly — International Financial Statistics, IMF — II
  - Lending Rate — Base Lending Rate — April-1999 to Nov-2010 — Monthly — International Financial Statistics, IMF — II and III
  - Money Market Rate — Money Market Rate — April-1999 to Nov-2010 — Monthly — International Financial Statistics, IMF — II and III
  - NER — Nominal Exchange Rate, Local Currency per US$ — Jan-2005 to Nov-2010 — Monthly — International Financial Statistics, IMF — II
  - Nominal GDP — Gross Domestic Product in local currency — 1995-2010 — Annual — Statistics New Zealand — II and V
  - Openess — Export plus Imports over GDP — 1995-2009 — Annual — Statistics New Zealand — II
  - Output — Real Gross Domestic Product — Jan-2005 to Sept-2010 — Quarterly converted to monthly data — Statistics New Zealand — II
  - Policy Rate — Monetary Policy Rate — April-1999 to Nov-2010 — Monthly — Reserve Bank of New Zealand — II and III
  - REER — Real Effective Exchange Rate, index 2005=100 — Jan-2005 to Sep-2010 — Monthly — International Financial Statistics, IMF — II
  - Target Bands — Inflation Target bands — April-1999 to Nov-2010 — Monthly — Reserve Bank of New Zealand — II

- Peru
  - CPI Inflation — Cons um er Price Index — Jan-2005 to Nov-2010 — Monthly — National Bureau of Statis tics — II, III and IV
  - Credit in Domestic Currency — Crédito SB al Sector Privado en Soles — Sep-2003 to Nov-2010 — Monthly — Central Bank of Peru — V
  - Credit in Foreign Currency — Credit in Foreign Currency, end of period, stocks — 1995-2009 — Annual — Central Bank of Peru — II
  - Credit to the Private Sector — Crédito SB al Sector Privado — Sep-2003 to Nov-2010 — Monthly — Central Bank of Peru — V
  - Deposit Rate — Tasa pasiva promedio en S/. (TIPMN) — Sep-2003 to Nov-2010 — Monthly — Central Bank of Peru — II and III
  - Deposits in Domestic — Liquidez SB en MN (mill. S/.) minus Circulante SB (mill. S/.) — Sep-2003 to Nov-2010 — Monthly — Central Bank of Peru — V
  - Deposits in Foreign Currency — Deposits in Foreign Currency, end of period, stocks — 1995-2009 — Annual — Central Bank of Peru — II
  - Expected Inflation — Inflation Expectations, 12-months ahead, using IMF staff calculations — Jan-2005 to Nov-2010 — Monthly — Central Bank of Peru — II and III
  - Foreign Reserves — Net International Reserves — Jan-2005 to Nov-2010 — Monthly — Central Bank of Peru — II
  - Lending Rate — Tasa activa promedio en S/. (TAMN), and Lending Rate — Sep-2003 to Nov-2010 — Monthly — Central Bank of Peru and IMF — II and III
  - Money Market Rate — Tasa interbancaria en Soles — Sep-2003 to Nov-2010 — Monthly — Central Bank of Peru — II and III
  - NER — Nominal Exchange Rate, Local Currency per US$ — Jan-2005 to Nov-2010 — Monthly — Central Bank of Peru — II
  - Nominal GDP — Gross Domestic Product in local currency — 1995-2010 — Annual — Central Bank of Peru — II and V
  - Openess — Export plus Imports over GDP — 1995-2009 — Annual — Central Bank of Peru — II
  - Output — Gross Domestic Product Index — Jan-2005 to Nov-2010 — Monthly — Central Bank of Peru — II
  - Policy Rate — Monetary Policy Rate — Sep-2003 to Nov-2010 — Monthly — Central Bank of Peru — II and III
  - REER — Real Effective Exchange Rate, index 2005=100 — Jan-2005 to Sep-2010 — Monthly — International Financial Statistics, IMF — II
  - Target Bands — Inflation Target bands — Sep-2003 to Nov-2010 — Monthly — Central Bank of Peru — II
  - Total Credit — Total Credit, end of period, stocks — 1995-2009 — Annual — Central Bank of Peru — II
  - Total Deposits — Total Deposits, end of period, stocks — 1995-2009 — Annual — Central Bank of Peru — II

- Uruguay
  - CPI Inflation — Cons um er Price Index — Jan-2005 to Nov-2010 — Monthly — National Bureau of Statis tics — II, III and IV
  - Credit in Domestic Currency — Credito al Sector Privado MN — Jan-2006 to Nov-2010 — Monthly — Central Bank of Uruguay — V
  - Credit in Foreign Currency — Credit in Foreign Currency, end of period, stocks — 1995-2009 — Annual — Central Bank of Uruguay — II
  - Credit to the Private Sector — Credito al Sector Privado — Jan-2006 to Nov-2010 — Monthly — Central Bank of Uruguay — V
  - Deposit Rate — Tasas de interés pasivas promedio — Sep-2007 to Nov-2010 — Monthly — Central Bank of Uruguay — II and III
  - Deposits in Domestic — Deposits in Domestic currency — Jan-2006 to Nov-2010 — Monthly — Central Bank of Uruguay — V
  - Deposits in Foreign Currency — Deposits in Foreign Currency, end of period, stocks — 1995-2009 — Annual — Central Bank of Uruguay — II
  - Expected Inflation — Inflation Expectations, 12-months ahead — Jan-2005 to Nov-2010 — Monthly — Central Bank of Uruguay — II and III
  - Foreign Reserves — Reserve Assets — Jan-2005 to Nov-2010 — Monthly — Central Bank of Uruguay — II
  - Lending Rate — Lending Rate - Ordinary — Sep-2007 to Nov-2010 — Monthly — International Financial Statistics, IMF — II and III
  - Money Market Rate — Tasa Call - Bancos Privados Interbancaria — Sep-2007 to Nov-2010 — Monthly — Central Bank of Uruguay — II and III
  - NER — Nominal Exchange Rate, Local Currency per US$ — Jan-2005 to Nov-2010 — Monthly — National Bureau of Statistics — II
  - Nominal GDP — Gross Domestic Product in local currency — 1995-2010 — Annual — Central Bank of Uruguay — II and V
  - Openess — Export plus Imports over GDP — 1995-2009 — Annual — Central Bank of Uruguay — II
  - Output — Indice de volumen físico de la industria manufacturera (w/o refinery) — Jan-2006 to Nov-2010 — Monthly — National Bureau of Statistics — II
  - Policy Rate — Monetary Policy Rate — Sep-2007 to Nov-2010 — Monthly — Central Bank of Uruguay — II and III
  - REER — Real Effective Exchange Rate, index 2005=100 — Jan-2005 to Sep-2010 — Monthly — International Financial Statistics, IMF — II
  - Target Bands — Inflation Target bands — Sep-2007 to Nov-2010 — Monthly — Central Bank of Uruguay — II
  - Total Credit — Total Credit, end of period, stocks — 1995-2009 — Annual — Central Bank of Uruguay — II
  - Total Deposits — Total Deposits, end of period, stocks — 1995-2009 — Annual — Central Bank of Uruguay — II

*Source: _wp1187 - REFERENCES*

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