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ZEPPELIN Chair of International Economics

Research Projects

Households’ Foreign Currency Borrowing in Central and Eastern Europe

Project Description

Foreign currency loans represent an important feature of recent financial developments in CEECs. This might pose a serious challenge for macroeconomic stability. Against this background, we study the determinants of foreign currency loans of households, using data on the behavior of households in nine CEECs. Our results reveal that foreign currency loans are driven by households’ lack of trust in the stability of the local currency and in domestic financial institutions. Moreover, special factors including remittances and expectations of euro adoption play an important role in selected regions. The financial crisis reduced foreign currency borrowing, but there is some indication this effect might be only temporary


Project Duration

from 01.05.2011 through 31.12.2013

Project Head

Prof. Dr. Jarko Fidrmuc

Project Execution


eigenfinanziertes Forschungsprojekt

Project-related Publications

  • Fidrmuc, Jarko / Hake, Mariya / Stix, Helmut: Households’ Foreign Currency Borrowing in Central and Eastern Europe, Journal of Banking and Finance, 2013, Jg. 37 (6): 1880 - 1897