June 29, 2018 / 1:24 AM / in 20 days

Peru central bank to ease dollar reserve requirements in July

LIMA, June 28 (Reuters) - Peru’s central bank said on Thursday it would reduce reserve requirements for dollar deposits to 35 percent from the current 36 percent, beginning in July, in an effort to boost credit and liquidity in local markets.

The measure will allow $169 million to be injected into the country’s financial system, the bank said in a statement.

Peru’s central bank has been easing dollar reserve requirements since early 2017 in an effort to counter a slowdown in credit and a period of higher international interest rates.

Central Bank President Julio Velarde said earlier in June that the central bank would nonetheless keep the foreign currency reserve requirement “relatively high” as a buffer against an unlikely run on dollars in one of Latin America’s most stable economies.

The reserves are a percentage of the deposits that financial institutions and banks must keep in their vaults.

Reporting by Marco Aquino; Writing by Dave Sherwood; Editing by Peter Cooney

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