PP/01/10 Dollarization in Belarus: Preconditions and Perspectives of Dedollarization Policies
This paper deals with the phenomenon of dollarization that is peculiar for transition countries. Rather often dollarization is considered as one of the preconditions of financial distresses and as the factor that restricts the effectiveness of the monetary policy and makes exchange rate intervention more dangerous. Moreover dollarization may lead to additional distortions in the economy, implying restrictions on the economic policies. However, one can argue in favor of dollarization, which enables countries to avoid inflationary finance and thus introduces stability in the financial sector. We show that in case of Belarus, emphasizing real dollarization and cash currency substitution should be highlighted in one row with the financial dollarization, while they intermediate each other.