Exchange rate regimes in Central and East European countries: Deeds vs. words

Abstract

We analyze whether de facto exchange rate regimes match de jure regimes in six Central and East European countries. Our first approach is based on the analysis of volatilities of exchange rates, reserves, and interest rates. In the second approach, we analyze movements of the exchange rate compared to those of possible anchor currencies. Our results indicate that Slovenia followed a crawling peg to the Deutsche mark and later to the euro de facto, but the evidence is less clear for the Romanian regime. We confirm that the Polish and the Hungarian regimes are close to the announced ones de facto, although we find some degree of implicit euro targeting for the Czech Republic and Slovakia. Journal of Comparative Economics 34 (3) (2006) 467–483.