Articles of category "Euro exchange rate"

The European Exchange Rate Mechanism (or ERM) was a system introduced by the European Community to reduce euro foreign exchange variability and achieve monetary stability in Europe. The ERM is based on the concept of fixed currency exchange rate margins, but with euro foreign exchange variable within those margins. A grid (known as the Parity Grid) of bilateral rates was calculated on the basis of the euro foreign exchange expressed in ECUs, and currency fluctuations had to be contained within a margin of 2.25% on either side of the bilateral rates.

The euro is the official currency of the European Union. The euro exchange rates are managed and administered by the European Central Bank (ECB) and the European System of Central Banks (ESCB), composed of the central banks of its member states. In the years following the Single European Act the EU has liberalized its capital markets, and as the ECB has chosen for monetary autonomy, the regime of the euros exchange rate is flexible or floating. In other words, the ECB has given up the instrument of the euros exchange rate and in general does not intervene on the foreign exchange rate markets.