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The international integration of foreign exchange markets in the central and east European accession countries: speculative efficiency, transaction costs and exchange rate premiums

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Author Info
Herrmann , Sabine
Jochem, Axel

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Abstract

A test of speculative efficiency on the foreign exchange markets of Poland, the Czech Republic, Hungary and the Slovak republic was unable to identify a cointegration relationship between forward and spot rates against the euro for the period between 1999 and mid-2002. Econometric studies confirm the existence of a time-variable exchange rate premium in all of the above countries. However, information and transaction costs also appear to be responsible for the observed deviations from speculative efficiency. The segmentation of the foreign exchange markets is likely to hamper the coordination of national monetary and foreign exchange policies within ERM II. In addition, this segmentation increases uncertainty in setting the central rate against the euro. -- Im Rahmen eines Tests der spekulativen Effizienz auf den Devisenmärkten Polens, der Tschechischen Repubik, Ungarns und der Slowakei kann für den Beobachtungszeitraum von 1999 bis Mitte 2002 keine Kointegrationsbeziehung zwischen Termin- und Kassakursen gegenüber dem Euro nachgewiesen werden. Ökonometrische Untersuchungen bestätigen die Existenz einer zeitvariablen Wechselkursprämie in allen genannten Ländern. Darüber hinaus scheinen aber auch Informations- und Transaktionskosten verantwortlich zu sein für die beobachteten Abweichungen von der spekulativen Effizienz. Die Segmentierung der Devisenmärkte dürfte die Koordinierung der nationalen Geld- und Währungspolitiken innerhalb des WKM II erschweren. Zusätzlich erhöht sie die Unsicherheit bei der Festlegung des Leitkurses gegenüber dem Euro.

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Paper provided by Deutsche Bundesbank, Research Centre in its series Discussion Paper Series 1: Economic Studies with number 2003,08.

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Date of creation: 2003
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Handle: RePEc:zbw:bubdp1:4205

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  1. Köhler, Matthias, 2005. "International Capital Mobility and Current Account Targeting in Central and Eastern European Countries," ZEW Discussion Papers 05-51, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  2. Jochem, Axel & Herrmann, Sabine, 2003. "The international integration of money markets in the central and east European accession countries : deviations from covered interest parity, capital controls and inefficiencies in the financial sect," Discussion Paper Series 1: Economic Studies 2003,07, Deutsche Bundesbank, Research Centre. [Downloadable!]
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