CZECH MONEY MARKET - EMERGING LINKS AMONG INTEREST-RATES

This paper assesses the Czech money market from 1993 to 1997. The auth ors' main interest lies in interactions between short- and long-term i nterest rates, and between exchange and interest rates. During the fin ancial crisis of 1997 the prevailing links among monetary variables te nded to gain strength. Short-term interest rates were the leading rate s on the market before the crisis, but a singular leading rate disappe ars in 1997. The linkages show that turbulence and uncertainty allowed interest rates to become more dependent on each other as well as to i nfluence the exchange rate. The exchange rate was found to influence s hort-term interest rates only.