Effects of a Strong Or Weak Philippine Peso Currency
When Euro was introduced, Exynox Scalper Reviewthere was a major change in currency policies and the countries not falling in the Eurozone were linked to Euro using conversion. This made them have a common currency, acting at the apex. The major aim was to achieve currency stability, along with to have a mechanism for evaluation of possible members of Eurozone. This mechanism or technique is called ERM2.
ERM has its base in the system of fixed currencies, and fixed margins of exchange rates, though the exchange rate itself could be variable- as long as it stays in the margins. It is also called a semi pegged mechanism. Before Euro was introduced, exchange rates followed the ECU (European Currency Unit). The value of this unit was computed by including all the participating currencies and finding a weighted average.
There is something called a parity grid (commonly known as grid). It consists of bilateral rates, and it is computed based upon central rates (as expressed by ECUs). Since the margins were fixed, currency fluctuations could not be more than 2.25 percent on either side. Italian Lira was an exception, which could fluctuate by 6 percent.