Dollarization in Viet Nam
AbstractThe paper maps the dollarization process in Vietnam since the beginning 1990s. We analyze the pros and cons of complete currency substitution. We discuss different forms and degrees of dollarization, and why some countries dollarized and others not. Further, the paper analyzes the case of partial dollarization, its implied risks for financial sector stability and the underlying dynamics of dollarization. Finally, we describe ways to reverse dollarization. The main conclusions are that dollarization is not a viable exchange rate regime option for Vietnam; furthermore, the current status of a partly dollarized economy poses considerable risks for financial sector stability and makes the country prone to exogenous shocks. The recent dollarization of banks’ loan portfolio has considerably increased systemic risk. The foreseeable opening of the Vietnamese economy will significantly increase the risks related to dollarization.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Indiana University, Kelley School of Business, Department of Business Economics and Public Policy in its series Working Papers with number 2004-25.
Date of creation: 2004
Date of revision:
Contact details of provider:
Postal: 1309 East Tenth Street, Room 451, Bloomington, IN 47405-1701
Web page: http://www.bus.indiana.edu/bepp/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Adalbert Winkler & Francesco Mazzaferro & Carolin Nerlich & Christian Thimann, 2004. "Official dollarisation/euroisation - motives, features and policy implications of current cases," Occasional Paper Series 11, European Central Bank.
- De Nicolo, Gianni & Honohan, Patrick & Ize, Alain, 2003.
"Dollarization of the banking system : good or bad?,"
Policy Research Working Paper Series
3116, The World Bank.
- Edwards, Sebastian, 2002.
"The great exchange rate debate after Argentina,"
The North American Journal of Economics and Finance,
Elsevier, vol. 13(3), pages 237-252, December.
- Eichengreen, Barry, 2001. "What problems can dollarization solve?," Journal of Policy Modeling, Elsevier, vol. 23(3), pages 267-277, April.
- Reinhart, Carmen & Calvo, Guillermo, 2001. "Reflections on Dollarization," MPRA Paper 8206, University Library of Munich, Germany.
- Barry Eichengreen & Ricardo Hausmann & Ugo Panizza, 2003. "Currency Mismatches, Debt Intolerance and Original Sin: Why They Are Not the Same and Why it Matters," NBER Working Papers 10036, National Bureau of Economic Research, Inc.
- Sebastian Edwards, 2001. "Dollarization and Economic Performance: An Empirical Investigation," NBER Working Papers 8274, National Bureau of Economic Research, Inc.
- Andreas Hauskrecht & Nhan Le, 2005. "Capital Account Liberalization for a Small, Open Economy," Working Papers 2005-13, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Rick Harbaugh).
If references are entirely missing, you can add them using this form.