Monday, March 26, 2012

Exchange Rate Mechanism (ERM)


Process by which member countries of an economic community (such as the European Union) maintain exchange rate parity among their currencies. The currencies are allowed to fluctuate with respect to one another within a specified limit. If the exchange rate between any two currencies reaches the limit, the central banks of both countries intervene to bring it back within the limit.


Photo: guardian.co.uk
Sources: dictionary.com

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