Central Rate

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Central Rate

In the European Monetary System, an exchange rate for a currency relative to the European currency unit. Each currency is permitted to move within a narrow range of the central rate, making each currency in the European Monetary System a semi-pegged currency.
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The CSGE bemoans the fact that the pay structure in West Bengal is already below the level of those in several other states such as Delhi or UP, which are paid at par with central rates.
In addition to the central rates, the European Central Bank and the central banks of the three candidate countries have set an intervention limit, above which the national monetary authorities are obliged to intervene in order to protect the value of their currency.
MCAs were used to prevent speculative trade arising from what are known as monetary gaps between the exchange rates used for agricultural purposes (the green rates) and the real exchange rates (market or central rates for currencies stabilized within the European monetary system).
On 16 March 1998 it was decided to adjust the central rates to account for the appreciation of the Irish Punt, resulting in a rise in the central rate of the Markka, to 6.
At the same time as the Council decided which countries will take part in EMU, it was announced that the exchange rates at which their currencies will irrevocably lock together will be the present ERM bilateral central rates.
In a bilateral agreement between the Netherlands and Germany - concluded in August 1993 when the Exchange Rate Mechanism (ERM) fluctuation margins were widened to plus/minus 15 per cent of the central rates - it was decided to keep the guilder-Deutschemark fluctuation margins unchanged at 2 1/4 per cent.
At the inception of EMU from 1 January 1999, a separate mechanism for exchange rate cooperation between the European Central Bank and national banks of non-participating countries will be set up, in most respects emulating the present ERM but based on central rates against the euro instead of the parity grid of the latter.
The new exchange rate mechanism will be based on central rates against the euro.
In March, speculative attacks on the Spanish peseta in the context of more generalised exchange market turbulence led to a realignment of central rates in the European Exchange Rate Mechanism (ERM), including a reduction in the central value of the escudo by 3.
25 per cent of the central rates against other members' currencies.
Britain entered the ERM on October 8, 1990, with fluctuation margins of |+ or -~ 6 percent around bilateral central rates, instead of the usual |+ or -~ 2.
In the EMS, the ECU's main functions are as numeraire for setting central rates in the exchange rate mechanism, as the unit of account for operations under the intervention and the credit mechanisms, and as a reserve instrument and means of settlement among EMS central banks.

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