Peru Central Bank Raises Reserve Requirements to Cool Credit
The average ratio will rise by 0.25 percentage point for bank deposits in soles and by 0.75 percent point for bank deposits in dollars effective next month, the central bank said in an e-mailed statement today. In October, banks held an average 17.8 percent of their sol deposits and 40 percent of their dollar deposits at the central bank, according to the statement.
“The measure seeks to act preventively to slow the pace of credit expansion in a context of high liquidity abroad and exceptionally low interest rates in international markets,” the central bank said in the statement.
The monetary authority increased the amount of reserves banks must hold at the central bank by 0.5 percentage points in May, September and October and by 0.75 percentage points in November, while keeping its benchmark interest rate steady at 4.25 percent.
The greater increase in reserve requirements for dollar- based bank deposits starting next month “seeks to mitigate the risks involved in foreign currency indebtedness,” the central bank said.
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