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Macroeconomic Implications of Financial Dollarization : The Case of Uruguay
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Uruguay has experienced a remarkable recovery since the crisis, supported by sound policies and favorable external conditions. With the framework put in place in , Uruguay abandoned an exchange rate peg in favor of a free float, adoped a monetary regime initially based on money targets, improved financial prudential norms and supervision, and accumulated significant central bank reserves.
Against this background, Uruguay now faces issues beyond those addressed to stabilize the economy.