02854nam 2200601Ia 450 991082124520332120200520144314.01-4623-1349-31-4527-6024-11-282-59045-697866138226351-4519-0803-2(CKB)3360000000443298(EBL)3012585(SSID)ssj0000940804(PQKBManifestationID)11492018(PQKBTitleCode)TC0000940804(PQKBWorkID)10955946(PQKB)11484120(OCoLC)535147017(IMF)WPIEE2006007(MiAaPQ)EBC3012585(EXLCZ)99336000000044329820760721d2006 uy 0engur|n|---|||||txtccrFinancial dollarization in Latin America /Robert Rennhack and Masahiro Nozaki1st ed.Washington, D.C. International Monetary Fund20061 online resource (36 p.)IMF working paper ;6/7Description 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 paper ;6/7.Monetary policyLatin AmericaCurrency questionLatin AmericaMonetary policyCurrency questionRennhack Robert1704941Nozaki Masahiro1718072MiAaPQMiAaPQMiAaPQBOOK9910821245203321Financial Dollarization in Latin America4125712UNINA