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Assessment Of The Exchange Rate Volatility In New Eu Member States And Romania1

Author

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  • Daniel Stavárek

    (Silesian University School of Business Administration Karviná, Czech Republic)

Abstract

This paper assesses exchange rate volatility is four new EU member countries (Czech Republic, Hungary, Poland, and Slovakia) and Romania. The study is motivated by the unavoidable participation of the new member states’ currencies in the Exchange Rate Mechanism II and fulfillment of the exchange rate stability convergence criterion. The results suggest decline of volatility and indicate that the Slovak koruna entered into the mechanism at optimal time. On the other hand, the admissible fluctuation band seems to be still too narrow for the remaining new members states’ currencies analyzed as well as the Romanian leu, thus they should remain out of ERM II for some time.

Suggested Citation

  • Daniel Stavárek, 2006. "Assessment Of The Exchange Rate Volatility In New Eu Member States And Romania1," Revista Tinerilor Economisti (The Young Economists Journal), University of Craiova, Faculty of Economics and Business Administration, vol. 1(6), pages 20-29, April.
  • Handle: RePEc:aio:rteyej:v:1:y:2006:i:10:p:20-29
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    File URL: http://feaa.ucv.ro/RTE/006-03.pdf
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    References listed on IDEAS

    as
    1. Christian Bauer & Bernhard Herz, 2005. "How Credible Are the Exchange Rate Regimes of the New EU Countries? : Empirical Evidence from Market Sentiment," Eastern European Economics, Taylor & Francis Journals, vol. 43(3), pages 55-77, May.
    2. M. Nowak & Ketil Hviding & Luca A Ricci, 2004. "Can Higher Reserves Help Reduce Exchange Rate Volatility?," IMF Working Papers 04/189, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    exchange rates; volatility; ERM II; new EU member states; Romania;

    JEL classification:

    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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