The euro and developing country finance: A survey

More than eight years after the introduction of the euro, impacts on developing countries have been relatively modest. Overall, the euro has become much more important in debt issuance than in official foreign exchange reserve holdings. The former has benefited from the creation of a large set of in...

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Bibliographic Details
Published in:The North American journal of economics and finance 2008-08, Vol.19 (2), p.175-191
Main Author: Masson, Paul R.
Format: Article
Language:English
Subjects:
Currencies
Debt
Developing countries
Economic impact
Euro
Foreign exchange
LDCs
Reserves
Studies
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Summary:More than eight years after the introduction of the euro, impacts on developing countries have been relatively modest. Overall, the euro has become much more important in debt issuance than in official foreign exchange reserve holdings. The former has benefited from the creation of a large set of investors for which the euro is the home currency, while demand for euro reserves has been held back by the dominance of the dollar as a vehicle and intervention currency, and the greater liquidity of the market for US treasury securities. Fears of further dollar decline may fuel some shifts out of dollars into euros, however, with the potential for a period of financial instability.
ISSN:1062-9408
1879-0860
DOI:10.1016/j.najef.2007.09.001