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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