The choice of exchange rate regime for Czech koruna in the context of ERM II participation and the related risks

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F26138077%3A_____%2F18%3A%230000901" target="_blank" >RIV/26138077:_____/18:#0000901 - isvavai.cz</a>

Result on the web

<a href="http://www.jois.eu/?403,en_the-choice-of-exchange-rate-regime-for-czech-koruna-in-the-context-of-erm-ii-participation-and-the-related-risks" target="_blank" >http://www.jois.eu/?403,en_the-choice-of-exchange-rate-regime-for-czech-koruna-in-the-context-of-erm-ii-participation-and-the-related-risks</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.14254/2071-8330.2018/11-1/9" target="_blank" >10.14254/2071-8330.2018/11-1/9</a>

Result language

angličtina

Original language name

The choice of exchange rate regime for Czech koruna in the context of ERM II participation and the related risks

Original language description

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.

Czech name

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Czech description

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Type

J_SC - Article in a specialist periodical, which is included in the SCOPUS database

CEP classification

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OECD FORD branch

50200 - Economics and Business

Project

<a href="/en/project/GA16-21506S" target="_blank" >GA16-21506S: New Sources of Systemic Risk in the Financial Markets</a><br>

Continuities

P - Projekt vyzkumu a vyvoje financovany z verejnych zdroju (s odkazem do CEP)

Publication year

2018

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical

Journal of International Studies

ISSN

2306-3483

e-ISSN

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Volume of the periodical

Neuveden

Issue of the periodical within the volume

1

Country of publishing house

PL - POLAND

Number of pages

16

Pages from-to

124-139

UT code for WoS article

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EID of the result in the Scopus database

2-s2.0-85044836726