International role of euro stable at historically low level – ECB

The international role of the euro remained stable in 2019 at a historically low level, according to an annual report published by the European Central Bank (ECB) on Tuesday.

The share of the euro across various indicators of international currency use averaged around 19 percent, close to its historical lows, but it remained unchallenged as the second most used currency globally after the U.S. dollar, the report said.

Specifically, at constant exchange rates, the share of the euro in globally disclosed holdings of foreign exchange reserves rose slightly to 20.5 percent at the end of 2019, 0.2 percentage points more than a year earlier.

The U.S. dollar remained the leading global reserve currency in the same period, although its share declined by almost a full percentage point to a two-decade low of 60.9 percent.

The share of the Chinese renminbi increased modestly, by less than 0.1 percentage point, the report added.

The share of the euro in outstanding international debt securities declined from 22.4 percent to 22.1 percent in 2019, while its share in outstanding international loans grew from 14.3 percent to 15.4 percent, showing that international debt issuance in euro continued to increase in volume.

The report also pointed out the significant role of the euro in global green bond markets, with the euro being the main currency of denomination for the issuance of green bonds in 2019.

The euro was launched in January 1999.

Its usage had declined after the global financial crisis and bottomed out in 2016, according to the ECB. The international role of the euro is primarily supported by a deeper and more complete Economic and Monetary Union, it noted.

“The recent COVID-19 pandemic underlines the urgency of these policies and reform efforts, which are paramount to raising the attractiveness of the euro globally,” ECB President Christine Lagarde said in a statement.