ISSUE: 2/2017

  • Volume 82
  • Number 2
  • 2017

Subscribe NEWSLETTER

Studia Europejskie –
Studies in European Affairs

ISSN: 1428-149X
e-ISSN: 2719-3780

Ccbync License

License

Articles published in the journal are under a Creative Commons Attribution – Non Commercial – No Derivatives 4.0 International License

Polish Exchange Rate Policy Dilemmas in ERM II

Abstract

This article presents considerations for the exchange rate regime choice from the point of view of the Polish zloty participation in the European Exchange Rate Mechanism II (ERM II). The first part defines the conditions for an exchange rate mechanism conducive to nominal convergence and macroeconomic stability of the Polish economy before and after the euro adoption. The assessment indicates that the above objective can be achieved with a broad (+/-15%) fluctuation band. The second part contains arguments for greater flexibility of the European Commission (EC) and the European Central Bank (ECB) in assessing the fulfilment of the exchange rate criterion as a necessary condition for taking advantage of a broad +/-15% fluctuation band. Furthermore, an emphasis is put on the need for the ECB support in intervening within this band when justified. These measures should reduce the risks of ERM II participation and make the mechanism more useful in supporting nominal and real convergence in catching up economies.

References

Bakker B.B., Gulde A.M., The Credit Boom in the EU New Member States: Bad Luck or Bad Policies? “IMF Working Paper”, No. 10/130, 2010.

Balli F., Basher S.A., Ozer-Balli H., From home bias to Euro bias: Disentangling the effects of monetary union on the European fi nancial markets, “Journal of Economics and Businesses”, No. 62/2010.

Berganza J.C., Bronto C., Flexible inflation targets, forex interventions and exchange rate volatility in emerging countries, “Journal of International Money and Finance”, No. 31/2012.

Bilski J., Janicka M., Konarski M., Integracja rynków walutowych wybranych krajów Europy Środkowej z rynkiem euro w perspektywie ich przystąpienia do ERM II i Unii Gospodarczo-Walutowej, „Materiały i Studia NBP”, No. 291/2013. BIS (2010), Annual Report.

Bofinger P., Wollmershauser T., Managed Floating: Theory, Practice and ERM II, Paper prepared for the CEPR/Deutsche Bank Research Workshop 2003.

Buiter W.H., Grafe C., Anchor, float or abandon ship: exchange rate regimes for the accession countries, “BNL Quarterly Review”, No. 221/2002.

Brzozowski M., Śliwiński P., Tchorek G., Wpływ zmienności kursu walutowego na strukturę napływu kapitału. Implikacje dla Polski, „Materiały i Studia”, No. 309. National Bank of Poland, 2014.

Calvo G.A., Leiderman L., Reinhart C.M., Infl ows of Capital to Developing Countries in the 1990s, “The Journal of Economic Perspectives”, Vol. 10, No. 2/1996.

Crespo-Cuaresma J., Égert B., MacDonald R., Non-Linear Exchange Rate Dynamics in Target Zones: A Bumpy Road Towards a Honeymoon, Some Evidence from the ERM, ERM2 and selected new EU Member States, “CESifo Working Paper”, No. 1511/2005.

D’Adamo G., Rovelli R., The Role of the Exchange Rate Regime in the Process of Real and Nominal Convergence, “IZA Discussion Paper”, No. 7627/2013.

ECB, Agreement of 16 March 2006 between the European Central Bank and the national central banks of the Member States outside the euro area laying down the operating procedures for an exchange rate mechanism in stage three of Economic and Monetary Union, 2006.

ECB, Resolution of the European Council of 16 June 1997, 2006.

Égert B., Kierzenkowski R., Exports and Property Prices in France: Are They Connected?, “The World Economy”, Vol. 37, No. 3/2014.

Ghosh A.R., Kim J., Qureshi M.S., Zalduendo J., Surges, “IMF Working Paper”, No. 22/2012.

Jimborean R., The exchange rate pass-through in the new member states, Document De Travail No 341, Banque de France, 2011.

Jonas J., Euro adoption and Maastricht criteria: Rules or discretion?, “Economic Systems”, No. 30(4)/2006.

Kapuściński M., Łyziak T., Przystupa J., Stanisławska E., Sznajderska A., Wróbel E., Mechanizm transmisji polityki pieniężnej w Polsce. Co wiemy w 2013 roku?, „Materiały i Studia NBP”, No. 306/2013.

Kontolemis Z., Exchange rates are a matter of common concern: policies in the run-up to the euro?, “European Commission, Economic Papers”, No. 191/2003.

Kowalewski P., Lessons to be Learnt from the ERM and their Applicability to the Accession Economies Seeking to Join the ERM2, “WIIW Research Reports”, No. 302/2004.

Krugman P., Target Zones and Exchange Rate Dynamics, “The Quarterly Journal of Economics”, No. 106(3)/1991.

Krugman P., Are currency crises self-fulfi lling?, in NBER Macroeconomics Annual 1996, Volume 11’, NBER Chapters, National Bureau of Economic Research, Inc. Lane P.R., Capital Flows in the Euro Area, European Commission, “Economic Papers”, No. 497/2013.

Lavrac V., ERM 2 Strategy for Accession Countries, Institute for Economic Research, “Working Paper”, No. 19/2003.

López J.R., Mendizábal H.R., On the Choice of an Exchange Regime: Target Zones Revisited, Documento de Trabajo Serie Economía E2002/10, Fundación Centro de Estudios Andaluces, 2003.

Lutkowski K., Czy autonomiczna polityka pieniężna rzeczywiście stoi na straconej pozycji, „Bank i Kredyt”, No. 11–12/2000.

Magud N., Reinhart C., Vesperon E., Capital Infl ows, Exchange Rate Flexibility, and Credit Booms, “IMF Working Paper”, No. 12/41, 2012.

Michalczyk W., Uwarunkowania kursu złotego względem euro w perspektywie przystąpienia do mechanizmu ERM 2, „Finanse. Czasopismo Komitetu Nauk o Finansach PAN, Komitet Nauk o Finansach PAN”, nr 1(6)/2013.

Mitra P., Capital Flows to EU New Member States: Does Sector Destination Matter?, IMF, Working Paper, No. 11/67, 2011.

NBP, Raport na temat pełnego uczestnictwa Rzeczypospolitej Polskiej w trzecim etapie Unii Gospodarczej i Walutowej, 2009.

NBP, Ekonomiczne wyzwania integracji Polski ze strefą euro, Warszawa 2014.

Ostry J.D., Ghosh A.R., Habermeier K., Chamon M., Qureshi M.S., Reinhardt D.B.S., Capital Infl ows: The Role of Controls, “IMF Staff Position Note”, nr 10/04, February 2010.

Papaspyrou Th., EMU Stategies: Lesson from Greece in view of EU enlargement, Paper presented at the Hellenic Observatory, The European Institute, London School of Economics, 2004.

Polański Z., Poland and the Euro Zone Enlargement: Monetary Policy, ERM II, and Other Issues, “Atlantic Economic Journal”, No. 32(4)/2004.

Reitz S., Taylor M., Exchange Rates in Target Zones – Evidence from the Danish Krone, “QBER Disscussion Paper”, No. 1/2013.

Rubaszek M., Serwa D., Analiza kursu walutowego, C.H. Beck, Warszawa 2009.

Sławiński A., Ewolucja mechanizmu kursowego w Polsce, „Gospodarka Narodowa”, nr 7–8/1999.

Stavarek D., Ability of the New EU Member States to Fulfill the Exchange Rate Stability Convergence Criterion, University Library of Munich, Germany, “MPRA Paper”, No. 1202/2006.

Tchorek, G., Brzozowski, M., Śliwiński, P. Determinants of capital flows to emerging and advanced economies between 1990 and 2011, “Portuguese Economic Journal”, No. 16(1)/2017.

Tchorek G., Konwergencja nominalna i realna a uczestnictwo złotego w ERM II, „Gospodarka Narodowa”, nr 10/2004.

Torój A., Przegląd doświadczeń innych państw związanych z wprowadzeniem euro: wypełnienie kryterium stabilności kursowej, Ministerstwo Finansów „Euroopracowania”, nr 4/2011.

Trenca I., Mihaia B., Curimana M., The compliance of the Romanian leu with the Exchange Rate Stability Criterion: a hypothetical assessment, “Procedia Economics and Finance”, No. 32/2015.

Williamson J., Exchange Rate Regime for Emerging Markets: Reviving the Intermediate Option, Institute for International Economics, Washington D.C., September 2000.

Winkler A., Mazzaferro F., Nerlich C., Thimann Ch., Offi cial Dollarisation/Euroisation: Motives, Features and Policy Implications of Current Cases, ECB, “Occassional Paper Series”, No. 11/2004.

Wójcik C., Dylematy polityki kursowej na drodze do członkostwa Polski w Europejskiej Unii Gospodarczej i Walutowej, „Gospodarka Narodowa”, No. 7–8/2001.

Woźniak A., Przenoszenie zmian kursu walutowego na infl ację w Polsce, „Bank i Kredyt”, nr 45(6), 45(6)/2014.

Language: English

Pages: 43-67

How to Cite:

Harvard

Tchorek, G. (2017) "Polish Exchange Rate Policy Dilemmas in ERM II". Studia Europejskie – Studies in European Affairs, 2/2017, pp. 43-67.

APA
Chicago