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Similar but Different. Edition No. 1
VDM Publishing House, June 2008, Pages: 72
This work examines the currency developments in the Visegrad countries (the Czech Republic,
Hungary, the Slovak Republic, and Poland). It is shown that despite the fact that these countries
are similar in terms of the macroeconomic indicators, they have different currency developments,
namely the long-term strengthening of the Czech and the Slovak korunas and a lack of this
strengthening in the Hungarian forint and the Polish zloty. I investigate what stands behind these
different exchange rate developments. Several determinants of the exchange rate are studied for
the period of 1999 to 2006, namely Consumer Price Index, interest rates, balance of payments,
current account, foreign trade, state budget, and the foreign (external) debt. By a comparative
analysis, I find that the Czech koruna is influenced positively by all these factors, the Slovak
koruna is also influenced positively, except for CPI and current account. However, the forint and
the zloty are mostly influenced negatively by these determinants. This explains, at least partially,
why the Slovak and the Czech koruna show a trend of appreciation, while this trend in lacking in
the zloty and the forint.
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