Peru Takes Steps to Ensure Banks Reduce Dollar Loans in 2016by
Banks that don't cut loans face higher reserve requirements
Measure seeks to make economy less vulnerable to dollar swings
Peru’s central bank announced measures to push lenders to further reduce outstanding dollar loans in the next 12 months as the sol trades near its weakest level in nine years.
Lenders have until December next year to meet the new targets for dollar loan reductions or face additional reserve requirements, the central bank said in an e-mailed statement. It also set a more demanding target for car and mortgage loans in dollars and said the limit will get more stringent every year, the statement said.
Similar measures introduced in the past year resulted in the banking system reducing its dollar loan ratio to 32 percent of total credit as of Sept. 30, down from 38 percent at the end of 2014. The sol’s slide against the U.S. currency has increased the cost of repaying dollar loans for companies and households earning in soles, diminishing their spending power.
The measures don’t affect dollar loans for foreign trade, the bank said.
During the next year lenders must reduce their total dollar loans to 80 percent of the level they were in September 2013 while for car and mortgage loans the target is 70 percent of the level outstanding in February 2013, it said.