= (ERM)

A feature of the European Monetary System (EMS), by which EMS members agreed to maintain the relative prices of their currencies within narrow limits. This was done by keeping each country's value in European Currency Unit (Ecus) within 21/4 per cent of an agreed parity grid of par values. Some currencies, including sterling, were allowed a wider range of 6 per cent. These values could be realigned only by mutual agreement. The ERM was founded in 1979, and over the first few years parities were realigned several times. The UK joined the ERM in 1990, but was forced to leave it in 1992 by speculation against the pound. The ERM was replaced when the Euro was adopted in 1999.

See also:

narrow-band ERM

• optimum currency area
• optimum savings
• optimum tariff
• option
• option value
• order book
• order-driven market
• order of integration
• orders, new
• ordinal utility
• ordinary least squares
• ordinary share
• organizational slack
• Organization for Economic Cooperation and Development
• Organization of Petroleum Exporting Countries
• organized labour
• organized sector
• origin
• oscillation
• oscillatory function
• other things being equal
• outcry, open
• outflow, capital
• outlier
• output