Journal of Banking & Finance Vol. 33 No. 10 2009
Financial dollarization: Short-run determinants in transition economies
Abstract
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.
- DOI
- 10.1016/j.jbankfin.2009.04.017
- Volume
- 33
- Issue
- 10
- Pages
- 1860-1873
- Language
- en
- Sources
- openalex crossref bibtex:phds-export.bib