Financial Dollarization: Short-Run Determinants in Transition Economies
Kyriakos Neanidis () and
Christos Savva ()
Centre for Growth and Business Cycle Research Discussion Paper Series from Economics, The University of Manchester
This paper examines the determinants of financial dollarization in transition economies from a short-run perspective. Using monthly data of deposit and loan dollarization we study the drivers of short-term fluctuations in dollarization and test their importance at different levels of dollarization. The results provide evidence that (a) the positive short-run effects of depreciation on deposit dollarization are exacerbated in high-dollarization countries; (b) short-run loan dollarization is mainly driven by banks matching of domestic loans and deposits, international financial integration, and institutional quality; and (c) both types of dollarization are affected by interest rate differentials and deviations from desired dollarization.
Pages: 42 pages
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Journal Article: Financial dollarization: Short-run determinants in transition economies (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:man:cgbcrp:113
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