In August 1986, the Irish pound was devalued by 8%, in part to reverse an unwarranted appreciation of the Irish pound’s effective exchange rate that had occurred mainly due to a sharp weakening of sterling. For over a decade thereafter, the nominal effective exchange rate for the Irish pound was generally stable, apart from the 10% devaluation in January 1993.
Finally, the above-mentioned structural changes that EMU brings about in euro area financial sectors, will also affect CEECs. The creation of the euro area might have an impact on both FDI and portfolio investment flows from the euro area countries to CEECs.