a method of stabilising exchange rates within the European Monetary System, where currencies could only move up or down within a narrow band (usually 2.25 per cent either way, but for certain currencies widened to 6 per cent) without involving a realignment of all the currencies in the system. nouna method of stabilising exchange rates within the European Monetary System, where currencies could only move up or down within a narrow band (usually 2.25 per cent either way, but for certain currencies widened to 6 per cent) without involving a realignment of all the currencies in the system.AbbreviationERM