Limits to variations in exchange rates when a country commits itself to hold the exchange rate between its own currency and some foreign currency or currencies within a limited band. Exchange rate bands may be broad or narrow: under the Exchange Rate Mechanism, for example, members of the European Monetary System agreed to keep their currencies within 2 per cent of parity with the European Currency Unit, an average of European currencies, while the UK and Italy only committed themselves to broader bands, of 6 per cent each side of parity.