March 25, 2018 / 11:16 PM / a year ago

Peru central bank to cut reserve requirements for dollar deposits

LIMA, March 25 (Reuters) - Peru’s central bank said on Sunday it would cut dollar reserve requirement to 36 percent from 37 percent starting in April to boost credit and offset the impact of a more restrictive monetary policy in the United States.

The measure will allow $181 million to be “immediately” injected into the local financial system, the bank said in a statement.

The monetary authority has been reducing its reserve requirement since January 2017 to counter a slowdown in credit and a period of higher international interest rates.

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

The recovery of the Peruvian economy has been affected by a corruption scandal that has put the brakes on investment and last week led to the resignation of President Pedro Pablo Kuczynski, who was facing impeachment by Congress although he denies involvement in any corrupt activity. (Reporting by Teresa Cespedes, writing by Hugh Bronstein; editing by Grant McCool)

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