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The international role of the euro

ECB/The international role of the euro/June 2018

In 2017 and early 2018, the strong and broad-based growth momentum in the euro area economy as well as the continued impact of the ECB’s asset purchase programme were among the main developments affecting the international role of the euro. In this environment, the international use of the euro showed signs of broad stabilisation. For instance, the shares of the euro in global payments and in global foreign exchange settlements increased noticeably in the second quarter of 2017. Portfolio inflows into euro area equities were as high as they ever have been since the advent of the euro in 1999, on the back of the growth momentum in the euro area economy, which supported the interest of foreign investors in euro area equity markets. However, developments also reflected the strengthening of the euro exchange rate over the review period. For example, the share of the euro in official holdings of foreign exchange reserves increased slightly, when measured at current exchange rates. By contrast, adjusting for exchange rate valuation effects, the share of the euro in global foreign exchange reserves decreased.

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