Peru has been without doubt the est regional RELLA, with a higher than the Latin American average and global expansion throughout almost the entire period spanning from the year 2001 onwards.
It is important to recognize the relevance that have had to achieve this result policies oriented to the market, which have endowed the Peruvian economy’s solid macroeconomic fundamentals are there currently.
The Peruvian Central Bank took two major decisions during the years 2000: introduce inflation targeting scheme and build up large foreign exchange reserves.
This system of monetary policy the Central Bank allowed him to maintain macroeconomic stability in adverse and favorable external contexts.
The most important instruments of monetary policy are: 1) reference
interest rate 2) rates of lace in Suns and $
3) sterilized in the foreign exchange market intervention.
It can be in the SPOT market or through derivatives as the Peruvian SWAP.
Inflation targets with partial dollarization partial dollarization means you can use the national currency and the foreign in all functions of the money (the dollar helps fight inflation) and the long-term goal
is that the families and the agents are taking more and more confidence in the local currency until at some point the dollar.
In the case of Peru a devaluation of the real exchange rate can be recessive, because the balance sheet effect can prevail over the competitiveness effect. The Balance sheet effect means that many agents have “Debt in dollars” and income in Nuevos Soles that increasing the price of the dollar deteriorates its accounting.
Movements in the foreign currency interest rate, driven by changes in the rate of lace by deposits in this currency, can also determine the position of the monetary policy.
The particularities of the Peruvian economy are associated with the importance of banks in financial intermediation and the partial dollarization of the brokerage. More than 40% of the debt of companies with the financial system is in foreign currency.
Real rate in nuevos soles depends, in turn, of interest rate of reference to interbank markets, expectations and average margins that banks charge.
Poured in this op-ed content is the sole responsibility of the author and do not necessarily reflect the editorial line nor the counter position.
