ECB : revieuw of the international role of the Euro

[Politics.be]

The European Central Bank (ECB) publishes today its report on “The international role of theeuro”, which examines developments in the use of the euro by non-euro area residents duringthe year 2011.The report finds that the international role of the euro remained relatively resilient during2011. When compared with other major international currencies, the share of eurodenominatedinstruments fluctuated only marginally between 2010 and 2011 in the marketsegments examined. The share of euro-denominated instruments decreased by 0.4 percentagepoints in global holdings of foreign exchange reserves when adjusted for valuation effects. Withregard to the turnover in foreign exchange markets, the share of the euro increased by aroundone and a half percentage points , while it dropped by 1.3 percentage points in the stock ofinternationally issued debt securities (also after valuation adjustment).

The report this year contains four special feature articles. The first of these finds that the
response of foreign investors in 2011 to the euro area sovereign debt crisis was different from
the global shock in 2008, lessening their demand for euro area securities, in particular those of
the high-yield sovereign issuers.
The second special feature article suggests that the international monetary system might be
already on its way of becoming tripolar, in that the Chinese RMB seems to be already assuming
a gradually more important international role.
The third special feature article shows that historical experience put forward the notion that
the advantages of incumbency in the use of international currencies are possibly not as strong
as usually believed, although they remain significant. New evidence presented in the report
suggests that the US dollar emerged indeed much earlier than previously thought as leading
international financing currency in global debt markets.
European Central Bank
Directorate Communications/Press and Information Division
Kaiserstrasse 29, D-60311 Frankfurt am Main
Internet: http://www.ecb.europa.eu
Reproduction is permitted provided that the source is acknowledged.
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The fourth special feature article finds that unofficial dollarisation/euroisation in emerging
economies (particularly foreign currency lending) has amplified the real costs of the global crisis
and can contribute to the build-up of financial stability risks which should be monitored closely
by local authorities.
The ECB’s report on “The international role of the euro” can be obtained on the ECB’s
website (http://www.ecb.europa.eu).

Bron: politics.be