Factors driving de-dollarization in Peru

Over the past decade, Peru has undergone a successful process of financial de-dollarization driven by market forces. The level of dollarization of loans and deposits in the banking system—across all sectors and maturities—has declined, with a greater reduction observed in the degree of dollarization of commercial loans, time deposits, and savings deposits. This analysis confirms that financial de-dollarization has been driven by macroeconomic stability, the introduction of macroprudential policies designed to better reflect exchange rate risks, and the development of the capital market in nuevos soles. (Audio: Department of Economic Publications)