01985cas a2200253 a 4500 AALejournalIMF006978 230101c9999 xx r poo 0 0eng d 5.00 USD 9781455211883 1018-5941 BD-DhAAL BD-DhAAL Garcia-Escribano, Mercedes. What is Driving Financial De-Dollarization in Latin America? / Mercedes Garcia-Escribano, Sebastian Sosa. Washington, D.C. : International Monetary Fund, 2011. 1 online resource (23 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students In the last decade, a group of Latin American countries (Bolivia, Paraguay, Peru, and Uruguay) experienced a gradual, yet sustained decline in financial dollarization. This paper documents the stylized facts and uses a standard VAR approach to examine the drivers of both deposit and credit de-dollarization. It finds that the exchange rate appreciation has been a key factor explaining deposit de-dollarization. The introduction of prudential measures to create incentives to internalize the risks of dollarization (including an active management of reserve requirement differentials), the development of a capital market in local currency, and de-dollarization of deposits have all contributed to a decline in credit dollarization. Continuing efforts on these fronts, while maintaining macroeconomic stability and strong fundamentals, would help deepening de-dollarization. Mode of access: Internet Sosa, Sebastian. IMF Working Papers; Working Paper ; No. 2011/010 Full text available on IMF http://elibrary.imf.org/view/journals/001/2011/010/001.2011.issue-010-en.xml IMF e-Library