§ Mr. Austin MitchellTo ask the Chancellor of the Exchequer if he will list the changes in exchange rates with the ERM for each currency since the start of the system, the date of each realignment and the exchange rate between the ecu and the US dollar on each occasion.
§ Mr. Maples[holding answer 28 November 1991]: The table shows the changes in each ERM currency's central rate against the ecu since the start of the system (or its entry to the system):
Ecu central rate1 Currency 1979 (or entry date) Now Deutschemark (DM) 2.5106 2.0559 French Franc (FFC) 5.8552 6.8951 Sterling (UKL) (0.6969) 0.6969 Dutch Guilder (HFL) 2.7208 2.3164 Belgian Franc/Luxembourg 39.458 42.403 Franc (BFR/LFR) — — Italian Lira (LIT) 1148.2 1538.2 Danish Krone (DKR) 7.0859 7.8420 Irish Punt (IRL) 0.6626 0.7674 Spanish Peseta (PTA) (133.80) 133.63 1 the method of calculation of central rates against the ecu in the ERM is such that they all adjust if there is a realignment. Bilateral central rates between any two currencies that have not realigned remain unchanged. There have been 12 realignments since the ERM started in 1979. The dates, the currencies that realigned their bilateral central rates, and the ecu/$ exchange rates at the time of realignment are listed below. Information on ecu/$ exchange rates in 1979 is not readily available and could be obtained only at disproportionate cost.
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Date of realignment Currencies that realigned ecu/$ rate at time of realignment 1979 13 March start off ERM — 24 September DM, DKR — 30 November DKR — 1981 23 March LIT 0.8243 5 October DM, DHL, FFC, LIT 0.9159 1982 22 February BFC, DKR 0.9678 14 June DM, DFL, LIT, FFC 1.0220 1983 21 March DM, DFL, DKR, BFC, FFC, LIT, IRL 1.0612 1985 22 July BFC, DKR, DM, FFC, IRL. DFL, LIT 1.2856 1986 7 April DM, DFL, BFC, DKR, FFC 1.1109 4 August IRL 0.9850 1987 12 January DM, DFL, BFC 0.9204 1989 19 June entry of Peseta 0.9578 1990 8 January LIT (to narrow band) 0.8264 8 October entry of sterling 0.7405
§ Mr. Austin MitchellTo ask the Chancellor of the Exchequer what representations he has received for a realignment of currencies within the ERM; what representations he has made on this to other member states; and what consultation procedures are required before any realignment can be made.
§ Mr. Maples[holding answer 28 November 1991]: Adjustments of central rates within the ERM are subject to mutual agreement by all countries participating in the ERM. Discussions between member states in this respect are confidential.
§ Mr. Austin MitchellTo ask the Chancellor of the Exchequer what help is available from other ERM698W members to support currencies falling to the bottom of their range; and whether more is available to currencies in 2.5 per cent. bands than to those in 6 per cent. bands.
§ Mr. Maples[holding answer 28 November 1991]: If one currency is at its limit against another in the ERM, the central banks of both currencies each have an unlimited obligation to buy or sell at the limiting rates during European business hours. The EMS provides for a very short-term facility (VSTF) under which credit is automatically available in unlimited quantities to finance such obligatory intervention at the limiting rates.
If intervention is undertaken when one currency is not at its limit against another in the ERM the VSTF can be made available, but not automatically.
The amounts that can be made available do not differ between wide band and narrow band currencies. VSTF credits have to be repaid within a period of three months.
§ Mr. Austin MitchellTo ask the Chancellor of the Exchequer what notification is required to members of the ERM of interest rate changes in member countries; and what advance warning he was given of the last French rate increase.
§ Mr. Maples[holding answer 28 November 1991]: National monetary authorities are not required to notify other ERM participants in advance of interest rate changes. I cannot reveal the content of consultations with the monetary authorities of other member states.