Real Dollarization in Peru

Even though financial dollarization has been considerably reduced (in the case of bank credit, from 82 percent in 1990 to less than 30 percent in 2017), transaction dollarization persists at still high levels (close to 60 percent). This imposes challenges to monetary policy, mainly during events of undue exchange rate volatility which affect domestic inflation through the exchange rate pass-through. This document presents measures of real dollarization at the both; sectorial level and costs in a sample of non-financial firms. These mesures are key to understand the dollarization phenomenon and design appropriate monetary policy. (Audio: Department of Economic Publications)