{
  "title": "Financial De-Dollarization: A Global Perspective and the Peruvian Experience",
  "publication": "IMF Working Papers, April 26, 2016",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/financial-de-dollarization-a-global-perspective-and-the-peruvian-experience-43877",
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  "summary": "We re-appraise the cross-country evidence on the dollarization of financial systems in emerging market economies. Amidst striking heterogeneity of patterns across regions, we identify a broad global trend towards financial sector de-dollarization from the early 2000s to the eve of the global financi",
  "sections": [
    {
      "heading": "Overview and Scope",
      "content": "- Publication title: Financial De-Dollarization: A Global Perspective and the Peruvian Experience\n- Authors: Luis Catão, Marco Terrones\n- Publication date: April 26, 2016\n- Series: Working Paper No. 2016/097\n- Volume: 2016; Issue: 097; Pages: 25\n- ISBN: 9781484341377; ISSN: 1018-5941"
    },
    {
      "heading": "Key empirical findings (global)",
      "content": "- A broad global trend toward financial sector de-dollarization occurred from the early 2000s to the eve of the global financial crisis of 2008–09.\n- Since the global financial crisis of 2008–09, de-dollarization has broadly stalled or even reversed in many economies.\n- A subset of economies continued to de-dollarize after 2008–09, implying that domestic factors interact with global factors.\n- The cross-country evidence exhibits striking heterogeneity of patterns across regions."
    },
    {
      "heading": "The Peruvian experience (since the early 1990s)",
      "content": "- Peru provides insight into the interaction between domestic and global factors in de-dollarization.\n- Factors identified as fostering de-dollarization in Peru:\n  - Low global interest rates\n  - Low global risk-aversion\n  - High commodity prices\n  - Domestic macro-prudential measures that raise the relative cost of domestic dollar loans\n  - The introduction and adherence to inflation targeting"
    },
    {
      "heading": "Drivers and mechanisms",
      "content": "- Global drivers:\n  - Movements in global interest rates\n  - Changes in global risk-aversion\n  - Commodity price dynamics\n- Domestic drivers:\n  - Macro-prudential policies affecting relative loan costs in domestic currency versus dollar loans\n  - Monetary framework credibility—specifically, the introduction and adherence to inflation targeting"
    },
    {
      "heading": "Policy implications and recommendations (implicit in findings)",
      "content": "- Strengthen domestic macro-prudential frameworks to raise the relative cost of domestic dollar borrowing where de-dollarization is a policy objective.\n- Maintain and adhere to credible inflation-targeting regimes to support de-dollarization.\n- Monitor global financial conditions (global interest rates and global risk-aversion) and commodity price cycles as important external influences on domestic dollarization dynamics.\n- Recognize heterogeneity across countries and regions; tailor policy mixes to domestic conditions and interactions with global factors.\n\nSource: IMF Working Paper “Financial De-Dollarization: A Global Perspective and the Peruvian Experience” by Luis Catão and Marco Terrones, April 26, 2016, Working Paper No. 2016/097, Pages: 25, ISBN: 9781484341377, ISSN: 1018-5941.\n\n---\n\n Content in this bundle\n\n- wp1697\n  - wp1697 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - wp1697 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/financial-de-dollarization-a-global-perspective-and-the-peruvian-experience-43877"
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    "Authors: Luis Catão, Marco Terrones",
    "Published: April 26, 2016",
    "Series: IMF Working Papers",
    "Publication title: Financial De-Dollarization: A Global Perspective and the Peruvian Experience",
    "Authors: Luis Catão, Marco Terrones",
    "Publication date: April 26, 2016",
    "Series: Working Paper No. 2016/097",
    "Volume: 2016; Issue: 097; Pages: 25",
    "ISBN: 9781484341377; ISSN: 1018-5941",
    "A broad global trend toward financial sector de-dollarization occurred from the early 2000s to the eve of the global financial crisis of 2008–09.",
    "Since the global financial crisis of 2008–09, de-dollarization has broadly stalled or even reversed in many economies.",
    "A subset of economies continued to de-dollarize after 2008–09, implying that domestic factors interact with global factors.",
    "The cross-country evidence exhibits striking heterogeneity of patterns across regions.",
    "Peru provides insight into the interaction between domestic and global factors in de-dollarization.",
    "Factors identified as fostering de-dollarization in Peru:",
    "Global drivers:",
    "Domestic drivers:",
    "Strengthen domestic macro-prudential frameworks to raise the relative cost of domestic dollar borrowing where de-dollarization is a policy objective.",
    "Maintain and adhere to credible inflation-targeting regimes to support de-dollarization.",
    "Monitor global financial conditions (global interest rates and global risk-aversion) and commodity price cycles as important external influences on domestic dollarization dynamics.",
    "Recognize heterogeneity across countries and regions; tailor policy mixes to domestic conditions and interactions with global factors.",
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