Relatiosnhip between ceiling deposit rate for the us dollar and dollarization in Vietnam

Abstract

The paper aims at assessing impacts of ceiling interest rate for US dollar deposit on dollarization index as well
as determinants of dollarization in Vietnam. By employing the VAR model, the paper provides empirical evidence
that low or zero US dollar ceiling deposit rate and significant interest rate differentials are important measures
of de-dollarizing process in Vietnam. In addition, inflation, devaluation, and international reserves are also found
other important determinants of dollarization status in Vietnam