Identifying the determinants that cause the value movements of currencies Denar, Kuna and Dinar

Sa？etak This paper aims to evaluate the relationship of real exchange rates of domestic currencies with macroeconomic variables in Macedonia, Croatia and Serbia by using econometric approaches. Macedonia is characterized by the regime of a fixed exchange rate, Croatia is characterized by a managed floating exchange rate, while Serbia is characterized by the regime of a floating exchange rate. The choice of an exchange rate regime is an important aspect of economic management, in order to ensure competitiveness, macroeconomic stability and development. Evaluation of the relationship of Croatian, Macedonian and Serbian real exchange rates is performed by employing the consistent methodology of vector error correction modelling (VECM). According to the results of the analyses of the real exchange rates on the long run, the selected independent variables have long-run causality in case of the real exchange rate of Croatian Kuna. In case of Macedonian Denar and Serbian Dinar the VECM is inappropriate