Assessing the impact of credit de-dollarization measures in Peru

This paper assesses the impact of de-dollarization measures implemented by the Central Reserve Bank of Peru between the years 2013 and 2016. Our results show that, despite an already slight downward trend in credit dollarization indicators before their implementation, the pace of de-dollarization increased after the adoption of the mentioned policy measures, especially after the announcement in the beginning of 2015. We find evidence that since the announcement of the first policy measure, 6 out of the 10 percentage point reduction in credit dollarization is related to the implementation of the De-dollarization Program. In contrast to a generalized impact of measures in 2015 onwards on all market segments, de-dollarization measures in 2013 affected mainly certain segments by firm size such as corporate and small firms. In addition, an heterogeneous impact is identified by loan size, where banks preferred to substitute larger loans from foreign to domestic currency.