05541oam 22014414 450 991078851970332120230828232604.01-4623-1349-31-4527-6024-11-282-59045-697866138226351-4519-0803-2(CKB)3360000000443298(EBL)3012585(SSID)ssj0000940804(PQKBManifestationID)11492018(PQKBTitleCode)TC0000940804(PQKBWorkID)10955946(PQKB)11484120(OCoLC)535147017(MiAaPQ)EBC3012585(IMF)WPIEE2006007(EXLCZ)99336000000044329820020129d2006 uf 0engur|n|---|||||txtccrFinancial Dollarization in Latin America /Robert Rennhack, Masahiro NozakiWashington, D.C. :International Monetary Fund,2006.1 online resource (36 p.)IMF Working PapersDescription based upon print version of record.1-4518-6267-9 Includes bibliographical references.""Contents""; ""I. INTRODUCTION""; ""II. TRENDS IN FINANCIAL DOLLARIZATION""; ""III. FINANCIAL DOLLARIZATION AS A RATIONAL RESPONSE TO INFLATION""; ""IV. THE ROLE OF CREDIT RISK""; ""V. CONCLUDING REMARKS""; ""APPENDIX I""; ""APPENDIX II""; ""REFERENCES""This paper tests several explanations for financial dollarization (FD), with an emphasis on Latin America. The results provide evidence that FD is a rational response to inflation uncertainty. The paper builds on previous research by finding that an exchange rate policy biased towards currency depreciation and currency mismatches tends to contribute to high FD and that FD is highly persistent. These results suggest that countries with significant FD should encourage the use of domestic currency by maintaining macroeconomic stability; allowing more exchange rate flexibility and less bias towards currency depreciation; and adapting prudential regulations to ensure that costs associated with FD are fully internalized in financial contracts. At the same time, restoring confidence in the domestic currency may take many years of sound policies.IMF Working Papers; Working Paper ;No. 2006/007Monetary policyLatin AmericaCurrency questionLatin AmericaBanks and BankingimfForeign ExchangeimfInflationimfMoney and Monetary PolicyimfMonetary Policy, Central Banking, and the Supply of Money and Credit: GeneralimfPortfolio ChoiceimfInvestment DecisionsimfFinancial Institutions and Services: GeneralimfMonetary SystemsimfStandardsimfRegimesimfGovernment and the Monetary SystemimfPayment SystemsimfBanksimfDepository InstitutionsimfMicro Finance InstitutionsimfMortgagesimfDevelopment Planning and Policy: Trade PolicyimfFactor MovementimfForeign Exchange PolicyimfPrice LevelimfDeflationimfMonetary economicsimfBankingimfCurrencyimfForeign exchangeimfMacroeconomicsimfCurrenciesimfDollarizationimfBank depositsimfExchange rate policyimfMoneyimfMonetary policyimfFinancial servicesimfPricesimfBanks and bankingimfBrazilimfMonetary policyCurrency questionBanks and BankingForeign ExchangeInflationMoney and Monetary PolicyMonetary Policy, Central Banking, and the Supply of Money and Credit: GeneralPortfolio ChoiceInvestment DecisionsFinancial Institutions and Services: GeneralMonetary SystemsStandardsRegimesGovernment and the Monetary SystemPayment SystemsBanksDepository InstitutionsMicro Finance InstitutionsMortgagesDevelopment Planning and Policy: Trade PolicyFactor MovementForeign Exchange PolicyPrice LevelDeflationMonetary economicsBankingCurrencyForeign exchangeMacroeconomicsCurrenciesDollarizationBank depositsExchange rate policyMoneyMonetary policyFinancial servicesPricesBanks and bankingRennhack Robert1462072Nozaki Masahiro1462073DcWaIMFBOOK9910788519703321Financial Dollarization in Latin America3670920UNINA