Role of #USD & #EUR in Global Monetary System:
[Charts from ECB Paper: 'International Role of Euro']
#Dollar continues to dominate FX Reserves, International Debt, Loans, Deposits, FX Turnover & Global payments
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FX Transactions settled in CLS System (Continuous Linked Settlement)
▪️ USD led FX market => involved in ~90% of all settlements in Dec'20
▪️ EUR second most actively settled ccy
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FX Share in Global FX RESERVES:
Sub-thread below
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FX Share in International DEBT:
▪️ USD accounts for ~66% of all International Debt issuance
▪️ EUR share has declined to 23%
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Borrowers of International Debt:
▪️ USD-denominated debt issuance by EM borrowers surged - favourable financing conditions in US
▪️ EUR-denominated debt issuance declined - less interest from US borrowers
▪️ Also rapid growth in USD-denominated green bond issuance in 2020
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FX Share in International LOANS:
▪️ USD share declined but still dominant ccy => 54% of international loans
▪️ EUR 16%, Others 27%
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FX Share in International DEPOSITS:
▪️ USD share of outstanding stock of international deposits ~54% => pandemic driven safe-haven Dollar demand + Fed's QE driven excess USD liquidity
▪️ EUR share 17%
@rodneyatwigram @chigrl
Reference:
ecb.europa.eu/pub/ire/html/e…
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