The Pros and Cons of Central Bank Deposit Dollarization

Posted on 08/10/2021

Here are some of the pros and cons of central bank deposit dollarization for emerging market central banks. Pros 1. It allows hedging against inflation and foreign exchange risks and supports portfolio diversification. 2. There is an appeal of foreign exchange as an anchor for monetary policy by forcing macro policy discipline. 3. Dollarization provides […]

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