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Real dollarization and monetary policy in Peru

Author

Listed:
  • Alex Contreras M.

    (BCRP, UDEP, UPC y UNI)

  • Zenón Quispe M.

    (BCRP)

  • Fernando Alonso Regalado S.

    (BCRP y Universidad del Pacífico)

  • F. Martín Martinez P.

    (BCRP y Universidad Nacional Mayor de San Marcos)

Abstract

Despite the average inflation levels of 2.8 percent between 2002 and 2015, within the range of the price stability goal, partial dollarization remains as the main vulnerability of the Peruvian economy. Although financial dollarization has already been importantly reduced, in the case of lending, from 82 percent at the end of 1990’s to 29 percent in June 2016; the dollarization of transactions persists at high levels such as 58 percent imposing important challenges to monetary policy, principally in events of higher volatility of the exchange rate which passes-through to domestic inflation. In this scenario, measuring the real dollarization at the sectorial level and at the level of the structure of costs of non-financial firms becomes crucial to understand it and to contribute to the design of the monetary policy in the presence of dollarization.

Suggested Citation

  • Alex Contreras M. & Zenón Quispe M. & Fernando Alonso Regalado S. & F. Martín Martinez P., 2017. "Real dollarization and monetary policy in Peru," Working Papers 95, Peruvian Economic Association.
    • Handle: RePEc:apc:wpaper:2017-095
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    References listed on IDEAS

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    Cited by:

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    3. Castellares, Renzo, 2017. "Condiciones de mercado y calidad como determinantes del traspaso del tipo de cambio," Revista Estudios Económicos, Banco Central de Reserva del Perú, issue 33, pages 29-41.

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