Slovakia

Slovakia started by fixing its exchange rate, but the bands were widened amidst rapid financial change and emphasis shifted towards price stability and inflation targets; the latter became formal in 2005 and Slovakia also allowed wide movements of its exchange rate, now within the wide ERM2 margins, before entering EMU in 2009.

Years Targets and attainment Classification
1993-5 currency pegged to basket, originally of five currencies, then of DM and USD (with known weights) only, margins of +/-0.5%, widened to +/-1.5%; devaluation July 1993; forex transactions still heavily regulated, but monetary instruments evolving augmented exchange rate fix AERF
1996-2004 currency pegged to basket, margins widened over 1996 to +/- 5%, then  January 1997 to +/-7%; peg abandoned late 1998 in favour of more or less managed float; monetary instruments now becoming largely indirect, by 2000 operating instrument is overnight interest rate; informal inflation targets given more prominence from 1999 but few other elements of inflation targeting loosely structured discretion LSD
2005-08 formal inflation targets partly met; currency in ERM2 from November 2005 but some intervention and full use of wide bands; revaluation 2007 inflation plus exchange rate targeting I&ERT
2009-14 membership of European Monetary Union currency union CU

Selected IMF references: RED 1993 p55; RED 1994 pp31-2, 53-4; SBI 1995 pp31-3; SR 1997 pp30-31; SR 2000 pp18, 22-3, 29; SR 2001 p22; SR 2005 pp13-16; SR 2006 pp13-15; SR 2007 pp9-10.

Additional sources: National Bank of Slovakia website, https://www.nbs.sk/en/monetary-policy/nbs-monetary-policy-up-to-2008;  Beblavy (2007a); Beblavy (2007b); Banerjee et al (2011).

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