Between 20% and 25% of euro banknotes by value are estimated to be held outside the euro area. The euro can be used as a reserve currency (as part of a country’s foreign exchange reserves), for saving purposes (hoarding of euro banknotes, particularly in periods of tension), for trade (for exports and imports), or as a currency peg.
Introduced in 1999, the euro has gradually become the single currency of 19 of the European Union’s 28 Member States, which together make up the euro area. Within the Eurosystem, close to 340 million citizens use the euro on a daily basis to make or receive payments in exchange for goods and services, to save or to make investments. But use of the euro is not just limited to the euro area – it also extends beyond the region’s borders.
The European Central Bank estimates that between 20% and 25% of euro banknotes (by value) are held outside the euro area, especially in neighbouring countries. At end-December 2018, at least EUR 170.3 billion worth of banknotes were estimated to be in circulation outside the euro area (see chart below), equivalent to 14% of the value of euro banknotes in issuance. However, this figure only shows net shipments of notes to non-euro area countries by major global banks operating in the currency markets, and is probably the minimum estimate of the actual stock of euro notes outside the single currency bloc. It fails to take into account other channels of outflows such as tourism, transfers of funds by migrants, and the shadow economy.
The main international uses of the euro are:
Each year, the European Central Bank publishes a report on the international role of the euro.
Updated on: 11/04/2019 12:44