analysis of time series for the currency pair croatian kuna / euro

The domestic currency Croatian kuna (HRK) was introduced in May 1995. To date, the Croatian National Bank (HNB), as a regulator and formulator of monetary policy in Croatia has operated a policy of stable exchange rate, typically referenced to the formal currency of the European Union euro (EUR). From the date of introduction of the euro 01/01/1999 until 01/01/2016 the value of the currency pair HRK / EUR changed in value by only 4.25% (HNB). Although the value of the Croatian kuna is relatively stable, there are some fluctuations on an annual level (e.g. in ­­­the last few years because of the global crisis) as well as  on periodic levels within a year. The aim of this paper is to show the movement of the value of the currency pair since the beginning of 2002 to the present day (the time curve), analyze the correctness, trends and periodicity (seasonal behavior), if any exist.

The research will be done using the method of Time Series Analysis, assuming that the external (global economy) and internal factors (economic policy) remain similar or the same. According to the results, further assessment of price developments in the period followed will be made by using the obtained predicative models. In the event that the curve contains the component of periodicity, the observed patterns will be studied further.