The Growing Role of the Euro in Emerging Market Finance [electronic resource] / Masson, Paul R.
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TextPublication details: Washington, D.C., The World Bank, 2007Description: 1 online resource (27 p.)Subject(s): Currencies and Exchange Rates | Debt | Debt Issuance | Debt Markets | Developing Countries | Emerging Market | Emerging Markets | Finance and Financial Sector Development | Fiscal and Monetary Policy | Foreign Exchange | Foreign Exchange Reserve | Holdings | Home Currency | International Finance | Macroeconomics and Economic Growth | Market Finance | Private Sector Development | Public Sector DevelopmentAdditional physical formats: Masson, Paul R.: The Growing Role of the Euro in Emerging Market Finance.Online resources: Click here to access online Abstract: 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.
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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