The determinants of loan dollarization in Armenia

Abstract

This paper provides analysis of Loan Dollarization determinants in Armenia given the huge importance of this phenomenon and highly dollarized economy of the country. The OLS model is estimated using data of Armenia for the period of 2000-2018. The empirical result of the paper shows that the main determinant of Loan Dollarization in Armenia is banks’ currency matching behavior. Some estimations were done to understand the determinants of Deposit Dollarization in Armenia, which as a main driving factor of Loan dollarization shown by the initial model.