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Determinants Of Deposit Dollarization: A Quantile Regression Approach (2012–2024)

Author

Listed:
  • Serap Dursun

    (TRAKYA UNIVERSITY)

  • Buse Topaloğlu

    (TRAKYA UNIVERSITY)

Abstract

Dollarization refers to the preference of economic agents for foreign currencies when the domestic currency fails to fully or partially perform its fundamental functions. This study examines the determinants of deposit dollarization in Türkiye using monthly data for the period 2012–2024. Deposit dollarization (DOLM), measured as the ratio of Foreign Currency Deposit Accounts (FCDA) to Total Deposits (TD), is analyzed using the Consumer Price Index (CPI), Consumer Confidence Index (CCI), Central Bank Weighted Average Funding Cost (WAFC), Unemployment Rate (UR), and Basket Exchange Rate Volatility (LNBASKET) as explanatory variables. Quantile Regression Analysis is employed, and coefficient heterogeneity across quantiles is examined using the Quantile Slope Equality Test. The findings indicate that unemployment and exchange rate volatility increase deposit dollarization, whereas consumer confidence and the weighted average funding cost reduce it, while inflation generally has a positive effect. Moreover, the effects of the explanatory variables vary across dollarization levels, suggesting that deposit dollarization is shaped not only by price stability but also by expectations and monetary policy. The results support the existing literature.

Suggested Citation

  • Serap Dursun & Buse Topaloğlu, 2026. "Determinants Of Deposit Dollarization: A Quantile Regression Approach (2012–2024)," Ekonomi Maliye Isletme Dergisi, Adil AKINCI, vol. 9(1), pages 51-69, June.
    • Handle: RePEc:gnx:emid43:2026-9-1-1838500
    DOI: 10.46737/emid.1838500
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    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Systems; Standards; Regimes; Government and the Monetary System
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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