DETERMINANTS OF DEPOSIT DOLLARIZATION: A QUANTILE REGRESSION APPROACH (2012–2024)

Serap Dursun and Buse Topaloğlu
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Serap Dursun: TRAKYA UNIVERSITY
Buse Topaloğlu: TRAKYA UNIVERSITY

Ekonomi Maliye Isletme Dergisi, 2026, vol. 9, issue 1, 51-69

Abstract: Dollarization refers to the preference of economic agents for foreign currencies when the domestic currency fails to fully or partially perform its fundamental functions. This study examines the determinants of deposit dollarization in Türkiye using monthly data for the period 2012–2024. Deposit dollarization (DOLM), measured as the ratio of Foreign Currency Deposit Accounts (FCDA) to Total Deposits (TD), is analyzed using the Consumer Price Index (CPI), Consumer Confidence Index (CCI), Central Bank Weighted Average Funding Cost (WAFC), Unemployment Rate (UR), and Basket Exchange Rate Volatility (LNBASKET) as explanatory variables. Quantile Regression Analysis is employed, and coefficient heterogeneity across quantiles is examined using the Quantile Slope Equality Test. The findings indicate that unemployment and exchange rate volatility increase deposit dollarization, whereas consumer confidence and the weighted average funding cost reduce it, while inflation generally has a positive effect. Moreover, the effects of the explanatory variables vary across dollarization levels, suggesting that deposit dollarization is shaped not only by price stability but also by expectations and monetary policy. The results support the existing literature.

Keywords: Dollarization; Consumer Confidence Index; Unemployment Rate. (search for similar items in EconPapers)
JEL-codes: E31 E42 F31 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:gnx:emid43:2026-9-1-1838500

DOI: 10.46737/emid.1838500

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