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The European currency unit (ECU) was the official monetary unit of the European monetary system (EMS) before being replaced by the Euro. It was introduced in 1979 to determine exchange rates and reserves among EMS members. The ECU was more of an accounting unit than a real currency. The Exchange Rate Mechanism (ERM) was also established to stabilize exchange rates. The ECU was used in international financial transactions and offered diversification through ECU-denominated securities.
