Univ.-Prof. Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.English-language economic definitions generated from approved international institutional sources.
In ERM II, central parity is the euro value jointly assigned to a participating country’s currency. It is used as the anchor for monitoring whether the currency remains within the arrangement’s agreed exchange-rate band. Actual market quotations can vary from this reference value, subject to the applicable limits.
Within ERM II, the central rate is the agreed euro-denominated value assigned to a participating currency. It anchors the mechanism’s monitoring of that currency and is used to establish the range within which its market exchange rate may normally move.