Factors Shaping Euro and Forint Cash Holding Ratios : The Rise of Cash Demand for Savings Purposes from the Turn of the Millennium

This study reviews the factors shaping forint and euro cash demand for savings purposes by examining the cash holding ratio. Forint and euro cash holding ratios are both rising, which points to an increase in cash savings. According to the results, in the long run, the cash demand for savings purpos...

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Bibliographic Details
Published in:Financial and economic review 2023-09, Vol.22 (3), p.67-96
Main Authors: Bódi-Schubert, Anikó, Kazimir, Ildikó Ritzlné
Format: Article
Language:English
Subjects:
Consumer behavior
Consumption
Cost control
COVID-19
Currency
Financial services
Households
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Summary:This study reviews the factors shaping forint and euro cash demand for savings purposes by examining the cash holding ratio. Forint and euro cash holding ratios are both rising, which points to an increase in cash savings. According to the results, in the long run, the cash demand for savings purposes is determined by traditional variables such as wealth and yields, along with uncertainty, the price of financial services and the institutional environment. In the short run, the change in uncertainty and the evolution of short interest rates dominate. Crises and the sudden shifts in the institutional environment lead to a shock, with large growth in the cash holding ratio for both currencies.
ISSN:2415-9271
2415-928X
DOI:10.33893/FER.22.3.67