The Credibility of the Hungarian Exchange Rate Regime 1997-98

29 Pages Posted: 17 Apr 2003

See all articles by Adam Szeidl

Adam Szeidl

Central European University

Date Written: February 2003

Abstract

This study intends to analyse the credibility of the Hungarian exchange rate regime preceding and during the Russian stock market crisis and devaluation (in 1998). Throughout the Paper the comparison with the similar regime in Poland is stressed. The basic tool applied is a measure of market imperfections, more precisely deviations from covered interest rate parity. The size, sign and dynamics of these deviations provide insight into the expectations of market participants. These in turn yield conclusions concerning the credibility and vulnerability of the regimes. Policy implications also follow.

Keywords: Credibility, exchange rate regime, market liquidity, transition

JEL Classification: F31

Suggested Citation

Szeidl, Adam, The Credibility of the Hungarian Exchange Rate Regime 1997-98 (February 2003). Available at SSRN: https://ssrn.com/abstract=396181

Adam Szeidl (Contact Author)

Central European University ( email )

Nador u. 9.
Budapest H-1051
Hungary
+36 1 327 3000 (Phone)
+36 1 327 3232 (Fax)

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