Drivers of financial de-dollarisation in CCA region.
| Thesis title in Czech: | Vlivy určující finanční de-dollarizace v CCA regionu |
|---|---|
| Thesis title in English: | Drivers of financial de-dollarisation in CCA region. |
| Academic year of topic announcement: | 2016/2017 |
| Thesis type: | diploma thesis |
| Thesis language: | angličtina |
| Department: | Institute of Economic Studies (23-IES) |
| Supervisor: | PhDr. Jaromír Baxa, Ph.D. |
| Author: | hidden - assigned by the advisor |
| Date of registration: | 09.02.2017 |
| Date of assignment: | 09.02.2017 |
| Date and time of defence: | 18.09.2018 08:30 |
| Venue of defence: | Opletalova - Opletalova 26, O105, Opletalova - místn. č. 105 |
| Date of electronic submission: | 31.07.2018 |
| Date of proceeded defence: | 18.09.2018 |
| Opponents: | doc. Ing. Tomáš Cahlík, CSc. |
| URKUND check: | |
| References |
| • Ben Naceur, Sami and Hosny, Amr and Hadjian, Gregory, How to De-Dollarize Financial Systems in the Caucasus and Central Asia? (September 2015). IMF Working Paper No. 15/203.
• Garcia-Escribano, Mercedes and Sosa, Sebastiàn, What is Driving Financial De-Dollarization in Latin America? (January 2011). IMF Working Papers, Vol. , pp. 1-23, 2011. • Ize, Alain and Kiguel, Miguel A. and Levy-Yeyati, Eduardo Levy, Managing Systemic Liquidity Risk in Financially Dollarized Economies (September 2005). IMF Working Paper, Vol. , pp. 1-31, 2005. • Kokenyne, Annamaria and Ley, Jeremy and Veyrune, Romain, Dedollarization (July 2010). IMF Working Papers, Vol. , pp. 1-50, 2010. • Reinhart, C.M., Rogoff, K.S. and Savastano, M.A., 2003. Addicted to dollars (No. w10015). National bureau of economic research. |
| Preliminary scope of work in English |
| Motivation
Dollarization is very popular research topic in academic literature. This phenomenon can be described as a disease for Latin America in 1970s, and at present for a number of post-Soviet states. It is a great concern for countries, operating monetary transmission mechanism through exchange rate channel, as a high level of dollarization prevents efficiency of monetary policy. Central banks are able to solely influence national currency and as there is a strong substitution between the domestic and foreign currencies, monetary policy becomes handicapped and only partially affects economy. Former Soviet countries in Caucasus and Central Asia (Armenia, Azerbaijan, Georgia, Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan and Uzbekistan) have highly dollarized financial system. After dissolution of the Soviet Union, these countries were facing high inflation, political instability and severe economic decline. All of these triggered insecurity in domestic currency, resulting incentives toward currency substitution. Nearly three decades have passed, but dollarization rate still remains persistent for those countries, even though they have achieved notable progress in macroeconomic stabilization. As time passes, achievement of de-dollarization is becoming primary goal for CCA region and is the main reason, why I am interested in this topic. Hypothesis: 1. Hypothesis #1: De-dollarization is driven by macroeconomic stability. 2. Hypothesis #2: Drivers of deposit de-dollarization are different from those of credit de-dollarization 3. Hypothesis #3: Development of financial institutions matter. Methodology: I will in the first place go through previous empirical analyses and collect data from National Bank of CCA region and National Bureau of Statistics. I intend to examine short-term drivers of financial de-dollarisation across categories of credits and deposits using Vector Autoregressive model. Impulse response function will allow me to see which factors have the significant effect on credit de-dollarisation and which on deposit de-dollarisation and how it differs among countries. Expected Contribution: Many empirical researches were done to examine causes of dollarisation, but academic literature on de-dollarisation is scant, especially while talking about CCA region. Thus this paper will attempt to partially compensate for this shortage and make incentives for further research. Outline: 1. Introduction 2. Literature review 3. Road to de-dollarization 4. Hypothesis 5. Methodology and data 6. Results 7. Conclusion 8. Bibliography |