In the 22nd edition of its annual review, published on Wednesday 21 June, the European Central Bank (ECB) stated that in 2022, in a global context marked by Russian military aggression in Ukraine and inflationary pressures, the international role of the euro had not weakened.
The report indicates that a composite index of the international role of the euro used by the ECB remained stable in 2022. Adjusted for the effects of exchange rate appreciation, the index rose by around 1.3 pp. At current exchange rates, this index is virtually unchanged.
The ECB reports that the share of the euro in various indicators of the international use of currencies averaged almost 20%.
The euro remained the second most-traded currency on the world’s foreign exchange markets after the US dollar. The euro’s share of the world’s official foreign exchange reserves has risen by 0.5 percentage points to 20.5% in 2022, at constant exchange rates.
The City of London is still the main trading centre for euro-denominated currencies.
As regards bond issues denominated in foreign currencies and the invoicing of imports and exports outside the euro area, the international role of the euro remained stable.
According to the report, the impact of Russia’s military aggression against Ukraine was reflected in an increase in net euro cash deliveries outside the euro area. This trend has been reversed, particularly with the rise in rates in mid-2022.
ECB President, Christine Lagarde, welcomed the euro’s robust international role in 2022, but said that this status should not be taken for granted. She felt that it was up to Europe’s political leaders to create the conditions that would allow the euro to prosper.
Fabio Panetta, member of the ECB’s Executive Board, stressed the importance of pursuing European economic and financial integration.
Link to the report: https://aeur.eu/f/7mk (Original version in French by Émilie Vanderhulst)