Numeraire System

Summary of Numeraire System

A multinational currency stabilization arrangement wherein participating national currencies are assigned a central rate, or value, in terms of a given unit of account; this rate is based upon a basket of all the participating currencies, weighted according to defined criteria. A margin would be fixed within which each currency might fluctuate. Fluctuations beyond the assigned margins would require intervention by the country issuing the unstable currency so as to restore equilibrium.

(Main Author: William J. Miller)