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The Euro on the Road East: Cash, Savings and Loans



The euro is already present throughout Central, Eastern and Southeastern Europe today. Against this backdrop, the OeNB has been regularly conducting household opinion polls for years in the countries that make up this economic space. The survey questions place special emphasis on euro cash holdings. The results show that the choice to hold euro cash is based on a wide variety of motives, above all geographic proximity, coupled with increasing economic interlinkages, the desire to minimize risk, and tradition. Decisions to have savings in euro or to take out euro-denominated loans can be attributed to similar considerations. In addition, macroeconomic factors such as inflation and exchange rate expectations may also play a role. What clearly emerges is that the extent of currency substitution varies considerably from country to country. In terms of cash, Slovenia, which was about to adopt the euro at the time of the most recent poll, is the frontrunner (approximately 40% of the population reported euro cash holdings in the second half of 2006). Hungary is last, with only a 7% rate. In terms of savings and loans, Croatia posts the highest percentage according to both the OeNB survey and the aggregated bank balance sheet data (approximately 80% of all savings deposits and/or borrowings of households and enterprises are denominated in foreign currency). At the opposite end of the spectrum is the Czech Republic, a country with approximately 10% in both areas.

Suggested Citation

  • Peter Backé & Doris Ritzberger-Grünwald & Helmut Stix, 2007. "The Euro on the Road East: Cash, Savings and Loans," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 114-127.
  • Handle: RePEc:onb:oenbmp:y:2007:i:1:b:6

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    Cited by:

    1. Helmut Stix, 2008. "Euroization: What Factors drive its Persistence?," Working Papers 140, Oesterreichische Nationalbank (Austrian Central Bank).
    2. Peter R Haiss & Wolfgang Rainer, 2012. "Credit Euroization in Eastern Europe: The ‘Foreign Funds’ Channel at Work," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 54(3), pages 471-505, September.
    3. Katharina Steiner, 2011. "Households’ Exposure to Foreign Currency Loans in CESEE EU Member States and Croatia," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 6-24.

    More about this item


    currency substitution; demand for euro.;

    JEL classification:

    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology


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