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How Do Credits Dollarize? The Role of Firm’s Natural Hedges, Banks’ Core and Non-Core Liabilities

Fatih Yilmaz

Working Papers from Research and Monetary Policy Department, Central Bank of the Republic of Turkey

Abstract: We show that firms' natural hedges (e.g., export revenues) and banks' foreign currency (FX) liabilities strongly dollarize credits. In particular, banks' non-core FX liabilities (e.g., syndications) in average feed credit dollarization almost three times more than their core FX liabilities (e.g., deposits). More importantly, these channels are affected differently by local and global macroeconomic conditions.

Keywords: Credit dollarization; Liability dollarization; Deposit dollarization (search for similar items in EconPapers)
JEL-codes: G21 G32 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-cfn
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