{
  "title": "What is Driving Financial De-Dollarization in Latin America?",
  "publication": "IMF Working Papers, January 1, 2011",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/31/what-is-driving-financial-de-dollarization-in-latin-america-24563",
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  "summary": "In the last decade, a group of Latin American countries (Bolivia, Paraguay, Peru, and Uruguay) experienced a gradual, yet sustained decline in financial dollarization.",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Authors: Mercedes Garcia-Escribano, Sebastian Sosa\n- Publication date: January 1, 2011\n- Type: IMF Working Paper (Working Paper No. 2011/010, Issue: 010)\n- Core focus: Documents stylized facts and uses a standard VAR approach to examine the drivers of deposit and credit de-dollarization in a group of Latin American countries (Bolivia, Paraguay, Peru, and Uruguay)."
    },
    {
      "heading": "Key findings",
      "content": "- In the last decade, Bolivia, Paraguay, Peru, and Uruguay experienced a gradual, yet sustained decline in financial dollarization.\n- Exchange rate appreciation has been a key factor explaining deposit de-dollarization.\n- The following factors contributed to a decline in credit dollarization:\n  - Introduction of prudential measures to create incentives to internalize the risks of dollarization (including an active management of reserve requirement differentials).\n  - Development of a capital market in local currency.\n  - De-dollarization of deposits.\n- Continuing efforts on these fronts, while maintaining macroeconomic stability and strong fundamentals, would help deepening de-dollarization."
    },
    {
      "heading": "Drivers analyzed (methodology)",
      "content": "- Empirical approach: standard VAR approach.\n- Targets of analysis: deposit dollarization and credit dollarization.\n- Countries studied: Bolivia, Paraguay, Peru, and Uruguay."
    },
    {
      "heading": "Policy implications and recommendations",
      "content": "- Maintain macroeconomic stability and strong fundamentals to support de-dollarization.\n- Pursue prudential measures that internalize the risks of dollarization (examples noted: active management of reserve requirement differentials).\n- Support the development of local-currency capital markets.\n- Promote deposit de-dollarization as a channel to reduce credit dollarization.\n\n---\n\n Content in this bundle\n\n- 1. De-dollarization 200110\n  - 1. De-dollarization 200110 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - 1. De-dollarization 200110 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/31/what-is-driving-financial-de-dollarization-in-latin-america-24563"
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    "Authors: Mercedes Garcia-Escribano, Sebastian Sosa",
    "Published: January 1, 2011",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781455211883.001",
    "Authors: Mercedes Garcia-Escribano, Sebastian Sosa",
    "Publication date: January 1, 2011",
    "Type: IMF Working Paper (Working Paper No. 2011/010, Issue: 010)",
    "Core focus: Documents stylized facts and uses a standard VAR approach to examine the drivers of deposit and credit de-dollarization in a group of Latin American countries (Bolivia, Paraguay, Peru, and Uruguay).",
    "In the last decade, Bolivia, Paraguay, Peru, and Uruguay experienced a gradual, yet sustained decline in financial dollarization.",
    "Exchange rate appreciation has been a key factor explaining deposit de-dollarization.",
    "The following factors contributed to a decline in credit dollarization:",
    "Continuing efforts on these fronts, while maintaining macroeconomic stability and strong fundamentals, would help deepening de-dollarization.",
    "Empirical approach: standard VAR approach.",
    "Targets of analysis: deposit dollarization and credit dollarization.",
    "Countries studied: Bolivia, Paraguay, Peru, and Uruguay.",
    "Maintain macroeconomic stability and strong fundamentals to support de-dollarization.",
    "Pursue prudential measures that internalize the risks of dollarization (examples noted: active management of reserve requirement differentials).",
    "Support the development of local-currency capital markets.",
    "Promote deposit de-dollarization as a channel to reduce credit dollarization.",
    "**1. De-dollarization 200110**"
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