It should be noted that changes in the real exchange rate of the Estonian kroon from the mid-1990s have crucially depended on the price-cost index--the ULC-based, PPI-based REER and terms of trade have exhibited neither strong depreciation nor appreciation.
Therefore, several studies have attempted to estimate the equilibrium level of the real exchange rate of the Estonian kroon.
Although the Estonian REERs have to some extent appreciated over the last decade, relevant literature has not found much evidence of misalignment of the Estonian kroon (see Table 1 for the summary of the results of different studies).
 1990-1997 None B-S, Panel Note: Column 3 refers to the undervaluation or the overevalutation of the Estonian kroon. Footnotes
Also, the right of people to hold and use their money is secured by the fact that its stability is guaranteed by pegging the Estonian kroon to the German mark (from January 1,1999) to the euro at the fixed exchange rate, and the cash in circulation is at least 100 percent backed by foreign reserves.
Implementation of the currency board arrangement and fixing the Estonian kroon to the German mark has been a solid nominal anchor to the economic recovery and development of the economy.
Although there were other options (for example, pegging the Estonian kroon to the euro with relatively wide fluctuation bands), since January 1, 1999, the Estonian kroon has been strictly pegged to the euro, both de facto and de jure, at 1 EUR = 15.6466 EEK, which is equivalent to fixing the kroon to the German mark at 1 DEM = 8 EEK.
From 1997 to 1998, there were some signs of financial crisis and speculative attacks against the Estonian kroon due to the developments in global markets (Asian and Russian crises) and developments in domestic markets (bursting of the 1997 stock exchange bubble, overly optimistic and risky attitudes toward the opportunities of the eastern markets, increased the current account deficit, and so on).
30] examined the behavior of the real exchange rate of the Estonian kroon, estimated its equilibrium value, and studied its impact on competitiveness of the Estonian economy.
Its further widening could cause serious pressure to devalue the Estonian kroon and abandon the currency board.
Of course, the Estonian kroon is not a miracle currency, and the currency board arrangement is not the only possible choice for Estonia that will remain unchanged forever.