Cover Macroeconomic Implications of Financial Dollarization
Macroeconomic Implications of Financial Dollarization
The Case of Uruguay
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Abstract

Uruguay has experienced a remarkable recovery since the 2002 crisis, supported by sound policies and favorable external conditions. With the framework put in place in 2002, Uruguay abandoned an exchange rate peg in favor of a free float, adoped a monetary regime initially based on money targets, improved financial prudential norms and supervision, and accumulated significant central bank reserves. Against this background, Uruguay now faces issues beyond those addressed to stabilize the economy. As the country pursues key postcrisis monetary and financial reforms, the analysis provided in this paper has a direct bearing on the ongoing efforts to move toward a fully fledged inflation-targeting regime and develop interest rates as monetary instruments, as well as on the preparedness of the financial system to deal with shocks, and the adequacy of current central bank reserves.

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Author:
Mr. R. G Gelos
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https://orcid.org/0000-0003-4362-676X
,
Mr. Alejandro Lopez Mejia
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, and
Mr. Marco A. Piñón-Farah
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Series:
Occasional Papers
Publisher:
International Monetary Fund
Language:
English
Publication Date:
25 Jul 2008
DOI:
https://doi.org/10.5089/9781589067271.084
ISBN:
9781589067271
ISSN:
0251-6365
Pages:
81
Keywords:
OP; inflation expectation; bank lending channel; sovereign spread; monetary policy credibility; deposit dollarization; Inflation; Bank credit; Reserve positions; Bank deposits; Emerging and frontier financial markets; Global; Central America; Eastern Europe; Caribbean
Legal-disclaimer:
The views expressed in this book are those of the authors and should not be reported as or attributed to the International Monetary Fund, its Executive Board, or the governments of any of its member countries.
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