Exchange Rate Mechanism


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Exchange Rate Mechanism (ERM)

The methodology by which members of the EMS maintain their currency exchange rates within an agreed-upon range with respect to other member countries.

Exchange Rate Mechanism

Used prior to the adoption of the euro, a method for reconciling differing exchange rates between currencies, allowing participation in the single European currency. Established in 1979, it was known as a "semi-pegged" system in which currencies were variable with respect to each other only within a certain range. After the introduction of the euro in 1999, the exchange rate mechanism was replaced by ERM II, which reconciles exchange rates for countries wishing to join the eurozone.

exchange rate mechanism (ERM)

see EUROPEAN MONETARY SYSTEM.
References in periodicals archive ?
Nevertheless, he is profoundly respected as one of the key individuals who transformed British monetary policy after the humiliation of the pound's ejection from the European Exchange Rate Mechanism (ERM) in September 1992.
The last time Britain linked its currencies with Europe, in the Exchange Rate Mechanism (1990-92), it was a disaster.
The Swedish krona is expected to enter the Exchange Rate Mechanism at a level near the weak end of financial market forecasts, according to two separate business reports.
The poll results were released by organisers of the campaign against the euro on the 10th anniversary of Black Wednesday, when Britain crashed out of the Exchange Rate Mechanism.
The Central Bank begins a new exchange rate mechanism for the pound which will allow it to fluctuate within a narrow band set by the bank.
Sterling last week zoomed to its highest level against the franc and deutschmark since 1992 when Britain crashed out of the European Exchange Rate Mechanism (ERM).
The EU Commission, allied with the French and German Governments, insists that there will have to be a new exchange rate mechanism (ERM) after 1999 with the outsiders keeping the value of their currencies in close alliance with the Euro.
George Soros made millions on currency speculation which effectively forced Britain out of the European Exchange Rate Mechanism.
i] is a slope dummy with a unitary value reflecting national membership in the Exchange Rate Mechanism (ERM), and [N.
The breakdown of the Exchange Rate Mechanism of the European Monetary System in 1992 was a particularly striking case of trying to lock exchange rates together when comparable economic forces were not close to being identical among the countries.
I can only imagine what kind of superficial and boring coverage Europe's currency crisis and the collapse of the Exchange Rate Mechanism got.
Until August 2, the participants in the Exchange Rate Mechanism were so tied together that the variations in their currencies were limited to a maximum of 4.