Baku. 9 June. REPORT.AZ/ The role of the euro in the global financial system declined last year, the European Central Bank (ECB) said on Wednesday, with the fall particularly notable in foreign exchange reserves, foreign currency debt issuance and cross-border loans.
Report informs, the overview of European Central Bank declares.
Battered by years of crisis and anaemic growth, the role of the euro has been in decline for years with rock-bottom interest rates and negative yields also weighing on demand.
The share of the euro in foreign exchange reserves fell 0.6 percentage points last year to 19.9 per cent, its sixth straight annual fall, hitting its lowest level since 2000, the ECB said.
“Moreover, the share of the euro in foreign exchange reserves has fallen by almost three percentage points since its peak in 2009, i.e. before the onset of the euro area sovereign debt crisis,” the ECB said in an annual report on the role of the euro.
“The euro remained the second-most important currency in the international monetary system, but with a significant gap to the US dollar,” the ECB added.
Although the US dollar remains the most widely used currency, its role has also been in slow decline, providing further evidence of a move towards greater multipolarity in the international monetary system, the ECB said.
The ECB added that part of the fall in euro-denominated currency reserves may be due to China starting to report some of its holdings to the International Monetary Fund, a major impact on the composition of global reserves given the country’s size.
In foreign currency-denominated debt issuance, the share of the euro fell 10.5 percentage point to 21.9 per cent while in cross-border loans, it fell 6.7 per cent to 21.3 per cent.
However, in outstanding international debt securities, outstanding international loans and outstanding international deposits, the share of the euro rose slightly last year.
“The share of the euro in outstanding international debt securities rebounded slightly in 2015, but remains well below the levels seen before the onset of the financial crisis when measured at constant exchange rates,” the ECB said.
Analytical Group of Report News Agency believes that, due to strengthening of role of the US-dollar in currency market will lead this currency to be the most widely used currency in global market.