The Impact of the Russia-Ukraine War on European Union Currencies: A High-Frequency Analysis

36 Pages Posted: 3 Mar 2023 Last revised: 4 Oct 2023

See all articles by Mahmut Zeki Akarsu

Mahmut Zeki Akarsu

University of Warsaw

Orkideh Gharehgozli

Montclair State University - Feliciano School of Business

Date Written: February 28, 2023

Abstract

This academic study examines how the ongoing Ukraine-Russia war has affected the valuation of five European Union currencies: the Polish Zloty, Hungarian Forint, Czech Koruna,
Swedish Krone, and Romanian Leu. Using high-frequency time series data and advanced statistical models, we analyze a 522-week period from January 1st, 2013, to February 24th, 2023,
with February 24th, 2022, as a key focal point. The Russia-Ukraine war had varying effects
on the currencies of non-Eurozone countries. Poland, Hungary, and Sweden experienced significant impacts, while Czechia and Romania remained relatively stable. Our research also
highlights the stability of the Euro as a reserve currency, which attracts investors during times
of crisis and protects participating economies from currency fluctuations. Additionally, our
analysis underscores the distinct impact of war on these currencies, influenced by their unique
political, economic, and financial structures and strengths.

Keywords: Excahnge Rate, Currency, Europe, War

JEL Classification: D60, O40, O50

Suggested Citation

Akarsu, Mahmut Zeki and Gharehgozli, Orkideh, The Impact of the Russia-Ukraine War on European Union Currencies: A High-Frequency Analysis (February 28, 2023). Available at SSRN: https://ssrn.com/abstract=4372534 or http://dx.doi.org/10.2139/ssrn.4372534

Mahmut Zeki Akarsu (Contact Author)

University of Warsaw ( email )

Orkideh Gharehgozli

Montclair State University - Feliciano School of Business ( email )

Upper Montclair, NJ 07043
United States

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