Meaning of “exchange rate mechanism” in the English Dictionary

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"exchange rate mechanism" in Business English

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exchange rate mechanismnoun [ S ]

also Exchange Rate Mechanism uk us abbreviation ERM

GOVERNMENT, ECONOMICS the system in which a group of European countries agreed to control the value of their currencies so that exchange rates between the countries did not change beyond particular limits. This system existed before the euro started to be used as a currency:

Market pressure drove the pound out of Europe's exchange rate mechanism.

(Definition of “exchange rate mechanism” from the Cambridge Business English Dictionary © Cambridge University Press)