Euroisation in the Western Balkans: The Evidence for Macedonian Economy

Boskov, Tatjana and Temelkov, Zoran and Zezova, Aleksandra (2017) Euroisation in the Western Balkans: The Evidence for Macedonian Economy. Mediterranean Journal of Social Sciences-MJSS, 8 (2). pp. 307-316. ISSN 2039-9340(Print) / 2039-2117(Online)

[thumbnail of MJSS2.pdf]

Download (391kB) | Preview


Euroisation is a problem with a long history and usually persistent phenomena. The high level of euroisation is common in
emerging countries in Europe as in the countries with fixed exchange rate regime. In Western Balkan countries have been
identified a strong presence of foreign currency. The fact is that transactions could take a place outside of the banking
channels, which is not a case for FX-loan and FX-deposit ratios. It’s difficult to measure how much foreign money is in the
economy. This is the reason to use data for currency substitution index. This index is high for Macedonia indicating high level of
real euroisation. After the crisis, the levels are reduced (lower remittances from abroad). Considering the exchange rate
experience of Macedonia, it’s likely to remain significantly euroised country for an extended period. IMF considers appropriate
strategy which provides support for the gradual de-euroisation in maintaining macro-prudential policy and development of the
domestic market. Another important strategy is the maintenance of prudent policies that mitigate foreign currency risks. The
paper shows the persistence of FX mainly in Macedonian economy and discusses about benefits and costs, in light of the
recent economic crisis.

Item Type: Article
Subjects: Social Sciences > Economics and business
Divisions: Faculty of Tourism and Business Logistics
Depositing User: Tatjana Boskov
Date Deposited: 15 Mar 2017 11:00
Last Modified: 15 Mar 2017 11:00

Actions (login required)

View Item View Item