ADDRESSING DE-EUROIZATION IN TRANSITION ECONOMIES: THE EVIDENCE OF MACEDONIA

Abstract

Considering the exchange rate experience of Macedonia, it’s likely to remain significantly euroized country for an extended period. IMF considers that the appropriate strategy is the one which provides support for the gradual de-euroization for maintaining macro-prudential policy, development of the domestic market and maintain prudent policies that mitigate the risks of foreign currency. The investigation indicates that macroprudential policies are becoming an important driver of de-euroization. In terms of other drivers of euroization the findings of this analysis support the conventional view that deposit euroization and the interest rate differentials were the main determinants of credit euroization in Macedonia. Also, this paper analyzes the main reasons for the process of euroization in Macedonia and will be presented any aspect of the potential benefits of deeuroization.

Key Words: eurozation, de-eurozation, foreign currency, economy, growth.