In this seminar Professor Ivashina will present her recent paper
(joint with Bryan Gutierrez and Juliana Salomao) that explores the interest rate differential for lending rates is closely matched by the differential in the deposit market using the evidence in Peru. The findings highlight that the preference for dollar loans is rooted on the local household preference for dollar savings and a banking sector that is closely matching its foreign assets and liabilities. It is also discovered that borrower competitive pressure increases the pass-through of this differential. Join us for a talk by Victoria Ivashina (Harvard Business School) on the reasons behind dollar debt.