Financial dollarization: Short-run determinants in transition economies
This paper examines the determinants of financial dollarization in transition economies from a short-run perspective. Using aggregate 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 (negative) short-run effects of depreciation (monetary expansion) 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, currency matching of assets and liabilities, international financial integration, and institutional quality; and (c) both types of short-run dollarization are affected by interest rate differentials and deviations from desired dollarization.
Year of publication: |
2009
|
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Authors: | Neanidis, Kyriakos C. ; Savva, Christos S. |
Published in: |
Journal of Banking & Finance. - Elsevier, ISSN 0378-4266. - Vol. 33.2009, 10, p. 1860-1873
|
Publisher: |
Elsevier |
Keywords: | Currency risk Financial dollarization Short-run variations Transition economies |
Saved in:
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