Determinants of Currency Substitution in Southeast European Countries / Determinante Valutne Supstitucije U Zemljama Jugoistočne Evrope

• Authors: Marina Pepić , Srđan Marinković , Ognjen Radović , Marko Malović
• Languages of publication: EN

Abstracts

EN

Currency substitution is widespread in less developed countries. Since it increases financial vulnerability and limits the effectiveness of monetary policy, it is often in the focus of scientists and experts. In this paper, we analyze the importance of euroization determinants in Serbia and neighboring countries - Albania, Bosnia and Herzegovina, FYR Macedonia, Romania and Croatia for the period 2003-2014. We examine the impact of domestic inflation, nominal exchange rate of the domestic currency against the euro, interest rate spread on domestic and foreign currency, foreign currency inflow in the form of foreign direct investments and exports, as well as the euroization of banks’financial resources on the degree of loan euroization. The results obtained by multiple regression panel methods confirm the statistical significance and assumed direction of the influence of all analyzed variables except inflation and current account balance.

Keywords

EN

currency substitution; financial vulnerability; inflation; domestic currency depreciation; capital inflow

• Publisher: Sciendo
• Journal: Economic Themes
• Year: 2015
• Volume: 53
• Issue: 2
• Pages: 162-184

Dates

published

2015-06-01

received

2015-04-28

accepted

2015-06-26

online

2016-04-15

Contributors

author

Marina Pepić

• National bank of Serbia, Belgrade, Serbia

author

Srđan Marinković

• Faculty of Economics, University of Niš, Serbia

author

Ognjen Radović

• Faculty of Economics, University of Niš, Serbia

author

Marko Malović

• Institute of Economic Sciences, Belgrade, Serbia

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Identifiers

DOI

10.1515/ethemes-2015-0010