Slovakia ties koruna to the euro

Slovakia has become the seventh new EU member state to officially link its currency, the koruna, to the euro. 

Slovakia has formally requested the inclusion of its national currency, the koruna, in the Exchange Rate Mechanism II (ERM II), which is often described as the ‘waiting room’ for the common European currency. 

Effective 25 November, the central rate of the Slovak koruna was set at 38.4550 against the euro. ERM II allows this rate to fluctuate up to 15% either way. Once in the ERM II framework, Slovakia is bound to respect EU criteria pertinent to inflation, interest rates and deficits.

Under the relevant EU rules, Slovakia has to stay in the ERM II for two straight years in order to be eligible to join the eurozone. Bratislava plans to switch over to the euro on 1 January 2009.

Slovakia is the seventh new EU member state to have entered the ERM II after Cyprus, Estonia, Latvia, Lithuania, Malta and Slovenia, and it is the first from the so-called Visegrad group (of which the Czech Republic, Hungary and Poland are also members).

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