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The BRIC is a grouping acronym that refers to the countries of Brazil, Russia, India and China, which are deemed to be at a similar stage of economic development. According to the report of Goldman and Sachs (2009), it is expected that the BRIC countries will be as big as the G7 by 2032. Not only the population and land area features of the BRIC countries, but also the speed of the growth rate and increasing proportion in the international trade have made them significant actors in the global economy. Turkey has some common aspects with the BRIC countries. The Turkish economy, along with the Chinese economy, has been experienced fast and stable growth period during the last decade. Besides the growth performance, Turkey, Brazil and India seem to have similar processes of economic development and integration to the world economy. Once they are widely co-integrated to the global system and they are members of the international organizations such as IMF, IBRD and GATT. However, these countries had applied state protectionism until 1990s. In this context, we might employ BRIC-T acronym to include Turkey in BRIC countries.

This study investigates causal dynamics between crude oil prices and exchange rates in Czech Republic, Poland and Hungary by employing monthly data from the beginning of flexible exchange regime in each country to December 2011. The study benefits from the recent advance in the time series econometric analysis and carries out linear causality, non-linear causality, volatility spillover and frequency domain causality tests. The frequency domain causality analysis results imply that oil price fluctuations affect real exchange rates in the long run in Poland and Czech Republic. On the other hand, frequency domain causality test results indicate that oil price fluctuations do not affect exchange rate in any period in Hungary despite its economy?s high imported energy dependency.