OeNB Report 2025/13: OeNB Euro Survey in Central, Eastern and Southeastern Europe: first results for 2024

Katharina Allinger, Elisabeth Beckmann, Söhnke Bergmann, Melanie Koch, Thomas Scheiber, Jette Leonie Weinel

OeNB Euro Survey Team, OeNB, Central, Eastern and Southeastern Europe Section, eurosurvey@oenb.at .

This report shares survey results from 2024 on how people in Central, Eastern and Southeastern Europe (CESEE) view and use the euro. The OeNB Euro Survey is conducted only in countries that do not have the euro as their official currency. It examines people’s trust in institutions, expectations and financial decisions and how these are connected to using the euro. The report also covers financial literacy and migration plans. It ends by giving details on how the 2024 survey was conducted.

Highlights

Abstract

This report presents results from the 2024 wave of the OeNB Euro Survey in Central, Eastern and Southeastern Europe (CESEE). This survey has been conducted since 2007 in selected CESEE countries, essentially the countries that have not yet (or only recently) adopted the euro. It serves to identify the trust of individuals in institutions, their monetary expectations and their financial decisions, especially with regard to de facto euroization – the use of financial assets denominated in euro.

Addressing the standard indicators of euroization, this report serves to show how determinants of demand for safe haven assets have developed over time, and in particular in 2024. We also discuss how indicators of demand for euro cash and deposits are correlated with socioeconomic characteristics and beliefs. An interactive dashboard allows interested readers to explore the core results on euroization and its determinants.

We further present a selection of the comprehensive survey data on financial literacy from the revamped dashboard and data from a special question module on migration intentions included in the 2024 survey wave. Finally, we address further ad hoc topics covered during this wave and conclude with descriptive results on the socioeconomic characteristics of respondents and references to the documentation on methodological aspects of the 2024 wave.

Findings presented here are primarily descriptive and should not be interpreted as causal evidence. For some assessments in this report, the number of observations is low, limiting the statistical power of the data analysis.

1 Euroization in CESEE

Eliciting information about euroization is at the core of the OeNB Euro Survey. Therefore, in the first section, we address the following questions: How frequently do consumers in CESEE hold euro cash and deposits? Have there been significant changes in currency and deposit substitution since 2023? And lastly: How have demand-side determinants evolved since 2023, given that demand for euro cash and deposits tends to be driven by trust in banks, expectations regarding the stability of the local currency as well as network effects?

1.1 Background and motivation

De facto euroization has remained a widespread phenomenon in several CESEE countries beyond the euro area. Previous research suggests that de facto euroization is primarily driven by demand at the individual level. Regarding the prevalence of foreign currency cash holdings, Stix (2013) develops a model that identifies key determinants of demand for foreign currency cash, including (1) transaction costs, (2) trust in banks versus social capital, and (3) network effects alongside expectations regarding inflation and exchange rates. Empirical evidence shows that a lack of trust in banks and memories of past banking crises play a crucial role in shaping cash preferences. Additionally, currency substitution network effects and expectations regarding the stability of both the local currency and the foreign “safe haven” currency influence cash demand. However, social capital – measured as trust in other people – does not appear to impact cash preferences.

Regarding deposit substitution, theoretical research highlights several key drivers of its persistence, including the minimum variance portfolio (Ize and Levy-Yeyati, 2003), market failure (Broda and Levy-Yeyati, 2006), implicit bailout guarantees (Ranciere et al., 2010) and network effects (Craig and Waller, 2004). Brown and Stix (2015) find that deposit euroization is driven by distrust in the stability of the local currency as well as hysteresis effects, where experiences of economic and financial crises during the transition from planned to market economies in the 1990s continue to shape expectations across generations. Network effects further contribute to deposit substitution.

Since the economic turbulence of the 1990s, policymakers in CESEE have built 30 years of “new” track records, often in the context of global crises such as the Great Financial Crisis and the COVID-19 pandemic. ¹ In 2022, trust in local currencies declined sharply and demand for euro cash increased, likely due to the initial shock of Russia’s invasion of Ukraine in February 2022. Although the war in Ukraine continues, no new shocks directly impacted CESEE households in 2023. However, in 2024, regions in five CESEE countries experienced severe flooding. Additionally, 2023 and 2024 saw renewed momentum in EU accession efforts. While significant interest rate hikes occurred in 2023, the ECB transitioned to a rate-cutting cycle in 2024. Monetary policy actions in CESEE countries varied, with some central banks adjusting rates according to their specific economic conditions. All of these developments may have influenced the demand for euro cash and euro-denominated savings deposits. ²

1.2 Indicators of asset euroization over time

Euroization of assets held by private individuals has two main dimensions: the use of foreign currency cash (currency substitution) and the use of foreign currency deposits (deposit substitution). The former can only be elicited by survey evidence. The left panel of chart 1 shows the percentage of individuals who hold euro cash in the nine CESEE countries covered by the OeNB Euro Survey. In Bulgaria, Czechia, North Macedonia and Poland, the percentage of individuals holding euro cash significantly increased from 2023 to 2024. The right panel of chart 1 shows the median amount held in euro by individuals who have any euro cash in CESEE. While Bulgaria, North Macedonia and Poland show an increase both in terms of the frequency of euro cash holdings and the amounts held, in Czechia, the number of people holding euro cash increased, but the amounts held by those who have euro cash decreased.

Examining both panels together reveals that in some countries, e.g., Czechia, euro cash holdings are common, but the amounts held are relatively low. This suggests that in these countries, euro cash is primarily used for transactions abroad. In contrast, other countries, like Serbia, exhibit both a high prevalence of euro cash holdings and larger amounts held, indicating that euro cash serves more as a store of value. ³

Are the figures in chart 1 high or low from a country’s perspective? By combining the information on the extensive and intensive margins, we calculate per capita euro cash amounts for the entire population of a country, following the methodology outlined by Scheiber and Stix (2009).

Table 1 shows that the average amount of euro cash per capita held increased in four countries. The increase in North Macedonia is particularly strong. Since the start of the survey in 2007, the highest amounts were calculated for 2024. ⁴

Table 1

To assess the overall importance of euro cash, the currency substitution index (based on Feige and Dean (2004), and Scheiber and Stix (2009)) expresses euro cash in percent of total currency in circulation. Chart 2 shows the development in euro cash holdings as a percentage of total cash holdings since 2007. Since 2023, currency substitution has increased in four countries and decreased in three. In North Macedonia and Bosnia and Herzegovina, the increase exceeds five percentage points. This is the largest rise since 2013 in Bosnia and Herzegovina, with currency substitution reaching 15% or more for the first time since 2011.

Chart 3 shows the development in deposit substitution over time. In all countries, deposit substitution decreased in 2024 with the highest decrease of around three percentage points observed in Serbia, Romania and North Macedonia. Serbia and Romania already had the highest decrease among all CESEE countries in 2023. However, these declines are minor and the most notable result is the overall stability of deposit substitution. A recent analysis by Petz et al. (2025) shows that deposit euroization declines with domestic currency appreciation, and that nonfinancial corporations’ deposits are more sensitive to exchange rate shocks than household deposits while also exhibiting greater time variation.

To have a compound picture of the extent of de facto euroization, we combine currency substitution with deposit substitution. Taking both indices together provides a picture of the overall extent of de facto euroization. The index is calculated as follows:

EI = (FCC + FCD) / (LCC + FCC + LCD + FCD)

where FCC is foreign currency cash, FCD is foreign currency deposits, LCC is local currency cash, and LCD is local currency deposits. FCC data are derived from the OeNB Euro Survey, the remaining information is based on aggregate statistics from national central banks. Chart 4 represents the development of the euroization index over time.

Considering the decrease in deposit euroization, it is not surprising that since 2023, de facto euroization of assets decreased in all countries except Bosnia and Herzegovina. The largest changes were observed in Romania and Serbia with decreases of 3.4 and 3.2 percentage points, respectively. However, these declines are minor and the key takeaway is the overall persistence of euroization, with a possible but very gradual decline. The slight increase in 2022 proved temporary, likely reflecting an initial strong reaction to the war in Ukraine.

1.3 Demand-side indicators of euroization over time

The figures presented so far are influenced by both supply-side (e.g., density of bank branch networks, availability of foreign currency deposits) and demand-side factors. Understanding the demand-side determinants is especially important for policymakers as they are less easily regulated than supply-side factors.

Besides assessing the prevalence of euro cash holdings, the OeNB Euro Survey also gathers information on whether individuals prefer to keep their savings in cash rather than in deposits. A lack of trust in the banking system and concerns over inflation or currency depreciation might lead people to prefer holding cash to savings deposits.

Chart 5 shows that in Serbia, most individuals prefer saving in cash over holding a savings deposit. However, this does not imply that the remaining individuals lack bank accounts. Over 90% of Serbians have a current account. The chart also highlights a significant decline in the preference for saving in cash in Romania since 2023, while in Bosnia and Herzegovina, this preference has increased notably over the same period, reaching the highest level since the start of the survey in 2007. In fall 2024, Bosnia and Herzegovina faced increased uncertainty due to political tensions, particularly in the Republika Srpska, and due to the postponement of local elections following severe flooding which had caused significant damage and cost many lives. These events may have fostered an atmosphere of uncertainty, leading to a greater preference for cash savings.

Turning to the demand for euro deposits, chart 6 illustrates the percentage of individuals who would prefer to deposit an amount equal to two average monthly salaries in euro rather than in local currency or another foreign currency. In Bulgaria, North Macedonia and Serbia, preferences for euro deposits increased somewhat. It is worth noting that this indicator of demand for deposit substitution is moving in the opposite direction from what monetary statistics would suggest (see chart 3). These positive changes, however, are mostly not significant.

1.4 How have determinants of demand for euroization developed since 2024?

A key factor influencing demand for euro cash and deposits is trust in both the local currency and the euro, as well as expectations about inflation and exchange rate trends. Chart 7 illustrates the percentage of individuals who believe that the local currency or the euro “will remain stable and trustworthy over the next five years.” In all countries, trust in both the euro and the local currency dropped in 2022 due to the war in Ukraine. Since then, it has recovered. Among the Western Balkan countries, Bosnia and Herzegovina is the only one where trust – specifically in the euro, not the local currency – has slightly decreased since 2023.

For euroization, relative trust plays a key role. While trust in the local currency has increased since 2022, it remains lower than trust in the euro. In 2024, in all countries except Albania, trust in the euro was higher than trust in the local currency. In Albania, the difference is less than 1 percentage point. As a result, a shift in portfolios toward the local currency is unlikely.

Chart 8 compares trust in the stability of currencies with trust in national and international institutions. In contrast to the comparatively high trust in the euro compared to their local currency, people’s trust in the ECB, the central bank behind the euro, is lower than trust in the central bank behind their respective local currency. This is partly because some respondents are unsure about what the ECB is. More than 10% answer “don't know” when asked about trust in the ECB, compared to less than 5% for their respective national central bank. In all countries, trust in the national central bank is higher than trust in the government. The difference is particularly large in Bulgaria, which is not surprising given the political situation. The difference between trust in the ECB and trust in the EU is much smaller. In five countries, trust in the EU is higher than trust in the ECB. North Macedonia is the only country where trust in the ECB is significantly higher than trust in the EU, likely due to recent developments in the accession negotiations. However, in North Macedonia, more than 15% also answer “don't know” when asked about trust in the ECB.

1.5 Factors correlated with euroization: results of a probit analysis

Probit regressions building on the descriptive evidence presented so far offer insights into the relationship between demand for cash and euro assets, and various factors such as socioeconomic characteristics, personal experiences, beliefs and network effects. Table 2 presents the average marginal effects from probit regressions, where the dependent variables are (1) euro cash holdings, (2) preference for savings in cash, and (3) preference for savings deposits in euro. The control variables follow the approach of Stix (2013) and Brown and Stix (2015).

The results show that education and income are key factors influencing the demand for euroized assets. Self-employed individuals and those receiving remittances are more likely to hold euro cash. Additionally, network effects, indicated by whether holding euro cash is common in a given country, are significantly positively correlated with euro cash holdings as well as preferences for cash savings and for euro-denominated deposits. Somewhat counterintuitively, expecting inflation to rise is positively correlated with a preference for cash savings. However, cash savings are frequently denominated in euro.

Trust in the stability of the local currency and the euro over the next five years significantly affects the preference to hold deposits in euro, yet it does not affect the preference for cash savings. The results for holding euro cash and preferring cash savings vary across several control variables, such as education. Those who hold euro cash include individuals who retain cash from travel, use euro for domestic payments or save in euro. Only individuals preferring euro savings deposits are similar in their socioeconomic characteristics, beliefs and expectations to those who prefer to save in cash. Therefore, the differences between columns 1 and 2 and columns 4 and 5 are not surprising.

Table 2

2 Financial literacy in selected CESEE countries

A factor influencing the financial decisions of consumers – and therefore potentially euroization – is financial literacy. Since 2012, the OeNB Euro Survey elicits data on how well people in CESEE understand various financial concepts: interest rates, inflation, risk diversification and exchange rates. In general, the topic of financial literacy has so far been given little attention in most CESEE countries. Therefore, data from the OeNB Euro Survey constitute an important step toward closing a research gap.

For example, chart 9 shows that the knowledge about inflation increased in most countries over the course of the last 13 years. Moreover, in Czechia, Hungary, Poland and Romania, inflation literacy strongly increased in 2023 and 2024, thus, after the high-inflation period of 2022. Using OeNB Euro Survey data, Beckmann and Kiesl-Reiter (2023) find that knowledge about inflation is in general affected by the level of (hyper-)inflation a person has experienced over the course of their life.

The OeNB’s revamped interactive financial literacy dashboard presents comprehensive data from the survey and provides a first glimpse of the state of financial literacy in CESEE. It also includes data for Austria collected in the Austrian Survey of Financial Literacy.

3 Migration intentions in selected CESEE countries

Migration and demographic change are key political issues in many CESEE economies, not least impacting growth, inflation and the effectiveness of monetary policy. Therefore, the OeNB Euro Survey collects data on migration intentions regularly (so far in 2014, 2017–19, 2021 and 2024). The latest data from the 2024 survey wave show that the number of people expressing migration intentions has fallen over time in most countries. In 2019, before the COVID-19 pandemic, 7% of people (on average across countries) stated that they intended to emigrate over the next 12 months. In 2021, during the pandemic, this figure was 5% and in 2024, it was 4.5%. The average masks heterogeneity across countries. In 2024, the highest number of individuals with migration intentions in the next 12 months was recorded in Albania and North Macedonia (10% and 11%, respectively) followed by Serbia, Romania, Bosnia and Herzegovina, Bulgaria, and Poland (between 2–5%, mentioned in declining order).The lowest rates were recorded in Hungary and Czechia (below 2%). The decline in the number of people intending to emigrate in the near future is good news for the CESEE countries, given that emigration has worsened demographic trends and the availability of skilled labor in many countries in the past.

The 2024 wave of the OeNB Euro Survey also included a question that allows us to assess the openness toward migration more generally. In addition to migration intentions in the near future, people were asked how likely they were to emigrate temporarily or permanently within the next ten years. Chart 10 shows that this is a much more substantial share of the population, namely roughly 10% on average across countries. The chart also shows those who respond with “don’t know” to one of the questions about migration intentions. On average, this is another 8.5% of the population, who apparently do not categorically exclude the possibility of emigrating at a future point in their lives. The graph illustrates marked cross-country differences. In Albania, people with migration intentions in the near or distant future make up 33% of the population. In Czechia and Hungary, the corresponding figure is only 7%.

In terms of reasons for emigration depicted in chart 11, most people state that they want to emigrate for reasons related to employment (46% across countries). This is followed by better living conditions abroad as the second main reason (26% across countries). Thus, improvements in labor market conditions and in public services – like education or health care – could be key in reducing migration intentions in CESEE further or in inducing people’s return (see also Raggl, 2022).

Finally, the more recent migration literature has increasingly emphasized that migration is often not a one-way journey, but that people may relocate multiple times over the course of their lives. This includes the possibility that migrants return home temporarily or permanently. In 2024, respondents were asked whether they had lived abroad before. Chart 12 shows that the share of these returnees is substantial in the CESEE countries, amounting to 14% on average. Hungary has the lowest share by far, with around 7% of the population having lived abroad. In most countries, the share is between 11% and 16%. In Albania, an astonishing 28% of the population state that they have previously lived abroad. In terms of time spent abroad, short-term stays of less than one year are common. They make up 35% of all stays across countries, but shares range from ca 25% in Bosnia and Herzegovina to around 50% in Czechia. Czechia stands out as a country with very few returnees who have spent more than three years abroad (around 20%). In contrast, Bosnia and Herzegovina has the most returnees who have spent more than three years abroad (around 50%), followed by Bulgaria, Albania and Serbia (around 40%).

4 Background information on the 2024 wave

The questionnaire of the OeNB Euro Survey consists of core questions that are asked each year and ad hoc, non-core questions on special topics. An interactive dashboard allows interested readers to explore the core results on euroization and its determinants.

The non-core questions in 2024 covered the following topics:

• cashless payments and digital skills;

• remittances and in-kind transfers;

• migration and migration intentions (see section 3);

• a survey experiment on deposit insurance knowledge;

• a survey experiment on preferences for local and foreign currencies (in three countries).

While some of these ad hoc questions are intended for in-depth research projects that will be available on the OeNB Euro Survey website in due course, others have already been used for policy debates.

Furthermore, the questionnaire regularly includes questions on the socioeconomic characteristics of respondents. Table 3 presents descriptive statistics for these data by country.

Table 3

The survey was in the field during October and the beginning of November 2024 in nine CESEE countries. Croatia is no longer part of the sample due to its adoption of the euro in 2023. Shortly before the launch of the fieldwork for the 2024 wave, five countries (Bosnia and Herzegovina, Czechia, Hungary, Poland, and Romania) experienced severe flooding. The flooding caused significant damage to infrastructure and communication networks, destroyed homes, and, in the most tragic cases, even cost lives. In Bosnia and Herzegovina, Czechia, Poland, and Romania, the regions most severely affected by the floods had to be excluded from the sample and were replaced by comparable, unaffected regions.

In all countries affected by floods, we asked respondents to what extent they were affected by the floods. We found no significant correlation between the sample composition (age, gender, education, employment status) and flood exposure. For further details on the flooding, see the methodology section of the OeNB Euro Survey website.

5 References

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Bittner, M. and T. Scheiber. 2022. The use of euro cash as a store of value in CESEE, in: Monetary Policy and the Economy Q1–Q2/22. 121–143.

Broda, C. and E. Levy-Yeyati. 2006. Endogenous deposit dollarization, in: Journal of Money, Credit and Banking 38. 963–988.

Brown, M. and H. Stix. 2015. The Euroization of Bank Deposits in Eastern Europe, in: Economic Policy 30(81). 95–139.

Craig, B. and C. J. Waller. 2004. Dollarization and currency exchange, in: Journal of Monetary Economics 51. 671–689.

Feige, E. L. and J. W. Dean. 2004. Dollarization and Euroization in Transition Countries: Currency Substitution, Asset Substitution, Network Externalities, and Irreversibility, in: V. Alexander, Melitz J. and G. M. von Furstenberg (eds), Monetary Unions and Hard Pegs: Effects on Trade, Financial Development, and Stability. Oxford University Press. 303–319.

Ize, A. and E. Levy-Yeyati. 2003. Financial dollarization, in: Journal of International Economics, 59, 323–347.

Petz, N., T. Scheiber and J. Wörz. 2025. How do euro deposits in CESEE react to exchange rate shocks?, in: OeNB Bulletin Q1/25. 50–71.

Rajkovic, I. and B. Urosevic. 2017. Dollarization of Deposits in the Short and Long Run: Evidence from CESE Countries, in: Panoeconomicus 64(1). 31–44.

Ranciere, R., Tornell, A. and A. Vamvakidis. 2010. Currency mismatch and systemic risk in emerging Europe, in: Economic Policy 25. 597–658.

Raggl, A. K. 2022. The role of public services quality in shaping migration intentions in Central, Eastern and Southeastern Europe, in: Focus on European Economic Integration Q3/22. 7–30.

Scheiber, T. and H. Stix. 2009. Euroization in Central, Eastern and Southeastern Europe – New evidence on its extent and some evidence on its causes. OeNB Working Paper 159.

Scheiber, T and J. Wörz. 2023. Exporting stability to the European neighborhood – the role of deposit euroization in CESEE revisited after 25 years of EMU, in: Monetary Policy and the Economy. Q4/23. 61–78.

Stix, H. 2013 . Why do people save in cash? Distrust, memories of banking crises, weak institutions and dollarization, in: Journal of Banking & Finance 37. 4087–4106.