Years of an unstable economy, unpredictable financial policies and high- and hyper-inflation rates in the 20th century taught Peruvians not to trust their currency. Those who had the means substituted their savings in local currency for Dollar holdings.
Even a decade after the introduction of the new Peruvian currency “Nuevo Sol” in 1991, that replaced the hyper-inflated Inti, nearly 80% of savings from households and companies were made in Dollar and the Dollar liquidity amounted to a little less than 70%.
The good economic management over the past 15 years however resulted in continuous economic growth and low inflation rates in Peru slowly convincing Peruvians to have faith in their country and currency again. The dollarization rate declined significantly.
While in March 2016 46% of total savings were made in Dollar, 40% of savings from households and 59% of savings from companies, the total dollarization rate declined in March 2017 to 41%; 36% households and 53% companies.
The liquidity in Dollar as well went down from 19% in March 2016 to 34% in March 2017.