Koruna Exchange Rate Turbulence in May 1997

The study has been written by the team of the CNB experts in order to provide evidence about the exchange-rate turbulence of koruna in 1997. First, it provides analysis of the root causes of the exchange rate turbulence in May 1997. Secondly, it takes an in-depth look at the attempts to solve the problem of turbulence, from the CNB strategy in the first days, the escalation, up to and including the changes in the exchange rate regime and the rationale behind these changes. Finally, it concentrates on the eventual easing of the turbulence and the CNB's strategy aimed at interest rate landing.