fluctuation margin

The new mechanism sought will be based on central rates agreed by the Member States and used to set the authorized fluctuation margins.

After its decision, the narrow bands under which European currencies had been allowed to fluctuate since 1979 were sharply relaxed and a 15 percent fluctuation margin introduced.

Although anchored to the euro, it will still have to have fairly broad fluctuation margins, with compulsory intervention within these margins, as well as credit facilities.

The country's exchange rates must stay within "normal" fluctuation margins of the European Exchange Rate Mechanism (ERM) for at least two years.

European Community finance ministers and central bank chiefs, in response, widened the fluctuation margin of the franc and six other currencies - to 15 percent from the old ranges of 2.25 percent and 6 percent.

The fluctuation margins for the yen, euro and dollar proposed by Mr Lafontaine are unhelpful, because we can only earn the right to make such demands by pursuing sound economic, fiscal and monetary policies.

To hold the pound within its margins the system requires a member country to intervene in the markets when its currency diverges 75 per cent of the way to its permitted fluctuation margins, either side of the central rate.

Intervention measures in support of currencies experiencing difficulties should be automatic when a currency reaches its fluctuation margin and possible before it does so, provided that such measures are justified by fundamental economic factors, and that their volume does not run counter to the objective of achieving price stability.

We believe that the only possible interpretation of Article 109j is that in order to take part in the third stage of the introduction of EMU it is required that Member States should not have devalued against the currency of any other Member State, the normal fluctuation margins being observed.