The Choice of Exchange Rate Regime for Czech Koruna in the Context of ERM II Participation and the Related Risks

• Autorzy: Mojmír Helísek , Roman Mentlík
• Języki publikacji: EN

Abstrakty

EN

Participation in the exchange rate mechanism ERM II (one of the Maastricht criteria - exchange rate stability) is compatible with certain exchange rate regimes only. The aim of this paper is to find arguments for choosing one of these regimes. The starting point is the current strategy of the euro introduction in the Czech Republic, and the expressed concerns about the risks associated with fixing of the exchange rate. The used method is analysis of data on the currency participation in ERM II and searching for analogies of Czech koruna. The analysis consists of the identification of exchange rate regimes used before and after ERM II so that to determine the duration of ERM II involvement. Fixing of the exchange rate in the regime peg with a band of oscillation of 15% in both directions is the working hypothesis. Criteria of the so-called normal fluctuations margins and the so-called severe tension are also discussed. Development trend of the CZK/EUR exchange rate is examined. The outcome of the research is finding the risks associated with this exchange rate regime. It is the risk of a narrow fluctuation band (2.25%) in depreciation direction and the risk in the form of foreign exchange intervention or interest rate differential at excessive appreciation of the exchange rate.(original abstract)

Słowa kluczowe

EN

Exchange Rate Mechanism (ERM II); Exchange rates; Maastricht Treaty; Czech Koruna

PL

Europejski Mechanizm Kursowy (ERM II); Kurs walutowy; Traktat z Maastricht; Korona czeska

• Czasopismo: Journal of International Studies
• Rocznik: 2018
• Tom: 11
• Numer: nr 1
• Strony: 124--139

Twórcy

autor

Mojmír Helísek

• University of Finance and Administration, Prague Czech Republic

autor

Roman Mentlík

• University of Finance and Administration, Prague Czech Republic

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Identyfikatory

DOI

10.14254/2071-8330.2018/11-1/9