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arbitrage assumption of uncovered band is credible band lacked credibility central bank Chart covered interest parity credibility improved currency band current account devaluation expectations domestic interest rate ECU peg exchange rate arrangement exchange rate band exchange rate credibility exchange rate falls exchange rates remained exchange risk premium expected future exchange expected rate five-year forward exchange five-year horizon foreign exchange reserves foreign exchange risk forward exchange rates future exchange rate given maturity hypothesis improvement in credibility increase indicating that credibility inflation inside the band inside the exchange interest rate differential interest rate parity lack of credibility Lars E.O. less credible liquidity premium long-term credibility deteriorated markka no-arbitrage assumption Nordic countries Norges Bank Norway Norwegian krone period rate falls inside rate-of-return band short-term forward exchange short-term forward rates sixty-month forward exchange spot exchange rate Sveriges Riksbank Sweden test is inconclusive three-month horizon uncertainty uncovered interest parity uncovered interest rate upper limit