Template-Type: ReDIF-Article 1.0

Author-Name: Aniko Bodi-Schubert
Author-Workplace-Name: Magyar Nemzeti Bank
Author-Email: schuberta@mnb.hu
Author-Person: 

Author-Name: Ildiko Ritzlne Kazimir
Author-Workplace-Name: Magyar Nemzeti Bank
Author-Email: ritzlnekazii@mnb.hu
Author-Person: 

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

Abstract: 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.

Classification-JEL: E12, E41, E58, E71
Keywords: cash demand, error correction model, uncertainty, cash holding ratio
Pages: 67-96
Volume: 22
Issue: 3
Year: 2023
File-URL: https://en-hitelintezetiszemle.mnb.hu/letoltes/fer-22-3-st3-bodi-schubert-ritzlne-kazimir.pdf
File-Format: Application/pdf
Handle: RePEc:mnb:finrev:v:22:y:2023:i:3:p:67-96