Monetary Policy in Dollarized Economies

Occasional Papers, March 15, 1999

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Monetary Policy in Dollarized Economies

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Bibliographic details

• Authors: Adam Bennett, Eduardo Borensztein, Tomás J. T. Baliño
• Published: March 15, 1999
• Series: Occasional Papers
• DOI: https://doi.org/10.5089/9781557757579.084

Summary

• Dollarization is defined as "the holding by residents of a substantial portion of their assets in foreign-currency-denominated assets."
• The paper analyzes policy issues that arise when the monetary sector is dollarized and examines various monetary strategies that may be pursued under dollarization.
• The paper considers the implications that dollarization has for the design of IMF programs.

Key findings and themes

• Dollarization is a common feature of developing and transition economies and is typical of many countries with IMF-supported adjustment programs.
• Policy issues addressed include the interaction between dollarization and:
  • Commercial banks
  • Currencies
  • Financial institutions
  • Monetary base
  • Monetary policy
  • Money
  • Reserve requirements
• Keywords and topics emphasized: asset, asset substitution, benefits of dollarization, Commercial banks, Currencies, currency, Dollarization, dollarized economy, Eastern Europe, FCD, foreign currency, IMF staff country report, inflation stabilization, Monetary base, OP, Reserve requirements, sound financial market environment.

Availability and formats

• Listed formats: More Formats on IMF eLibrary; Order a Print Copy; Create Citation; Share
• Example citation (Chicago) shown on page:
  • Adam Bennett, Eduardo Borensztein, and Tomás J. T. Baliño Monetary Policy in Dollarized Economies, (USA: International Monetary Fund, 1999) accessed 9/18/2026, https://doi.org/10.5089/9781557757579.084

Source: https://www.imf.org/en/publications/occasional-papers/issues/2016/12/30/monetary-policy-in-dollarized-economies-2897