The Growing Role of the Euro in Emerging Market Finance
More than eight years after the introduction of the euro, impacts on developing countries have been relatively modest. Overall, the euro has become much more important in debt issuance than in official foreign exchange reserve holdings. The forme...
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| Format: | Policy Research Working Paper |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2007/11/8665371/growing-role-euro-emerging-market-finance-growing-role-euro-emerging-market-finance http://hdl.handle.net/10986/7584 |
| Summary: | More than eight years after the
introduction of the euro, impacts on developing countries
have been relatively modest. Overall, the euro has become
much more important in debt issuance than in official
foreign exchange reserve holdings. The former has benefited
from the creation of a large set of investors for which the
euro is the home currency, while demand for euro reserves
has been held back by the dominance of the dollar as a
vehicle and intervention currency, and the greater liquidity
of the market for US treasury securities. Fears of further
dollar decline may fuel some shifts out of dollars into
euros, however, with the potential for a period of financial instability. |
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