Inflation Targeting and Quantitative Tightening: Effects of Reserve Requirements in Peru

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Author
Castillo, Paul ;
Date issued
Apr 2014
Subject
Monetary Policy;
Interest Rate;
Exchange Rate;
Fiscal Policy;
Policy Evaluation
JEL code
E51 - Money Supply • Credit • Money Multipliers;
E52 - Monetary Policy;
E58 - Central Banks and Their Policies;
G21 - Banks • Depository Institutions • Micro Finance Institutions • Mortgages
Country
Peru
Category
Working Papers
This paper provides an overview of the reserve requirement measures undertaken by the Central Bank of Peru. It provides a rationale for the use of these instruments as well as empirical evidence of their effectiveness. In general, the results show that tightening reserve requirements has the desired effects on interest rates and credit levels at both banks and smaller financial institutions (cajas municipales).
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