Deposit Dollarization in Turkey: A Rolling Window Analysis
A. Yasemin Yalta () and
A. Talha Yalta ()
Additional contact information
A. Yasemin Yalta: Department of Economics, Hacettepe University, Turkey
A. Talha Yalta: Department of Economics, TOBB University of Economics and Technology, Turkey
No 1626, Working Papers from Economic Research Forum
In the recent years deposit dollarization in Turkey has been on the rise, reaching record levels in 2021. This was caused by a series of economic as well as political shocks namely the coup attempt in 2016, the switch to the presidential system in 2018, and the Covid-19 pandemic in 2020. This study contributes to the literature by examining the time varying reactions of deposit dollarization to the changing inflation, interest rate volatility, real exchange rate, and the consumer confidence before and after these shocks experienced by the country. The results based on rolling window maximum entropy bootstrap estimates, and monthly data between 2013 and 2021, reveal that all of the model variables had significant and sometimes asymmetric effects on deposit dollarization during different stages of this turbulent period. In particular, we observe a weakening effect of both inflation and the real exchange rate over time, while the impact of interest rate volatility increases after 2017. Therefore, a policy change toward increasing monetary policy credibility is required for achieving de-dollarization in the Turkish economy.
Date: 2023-03-20, Revised 2023-03-20
New Economics Papers: this item is included in nep-ara and nep-mon
References: Add references at CitEc
Citations: Track citations by RSS feed
Published by The Economic Research Forum (ERF)
Downloads: (external link)
https://erf.org.eg/publications/deposit-dollarizat ... g-window-analysis-2/ (application/pdf)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:erg:wpaper:1626
Access Statistics for this paper
More papers in Working Papers from Economic Research Forum Contact information at EDIRC.
Bibliographic data for series maintained by Namees Nabeel ().