The international role of the euro remained broadly stable in 2023. The share of the euro across various indicators of international currency use remained above 19%, close to the average since its introduction in 1999. The euro also remained the second most important currency globally. These were some of the main findings in the annual review of the international role of the euro, published today by the European Central Bank (ECB).
Last year was marked by still elevated global inflationary pressures and tight monetary policy among major central banks. Geopolitical tensions continued to raise the risk of a more fragmented international monetary system. “Although the data so far show no evidence of substantial changes in the use of international currencies, we need to remain vigilant to any cracks that start appearing”, said ECB President Christine Lagarde.
In 2023 the share of the euro in global foreign exchange reserves decreased by one percentage point at constant exchange rates to 20%, a level last seen in 2020. Other indicators of the international role of the euro point to declines, albeit limited, in the position of the euro. These include the outstanding stock of international deposits, the outstanding stock of international loans, and global foreign exchange settlements. The share of the euro in outstanding international debt securities and in invoicing of goods traded between the euro area and non-euro area countries increased. At the same time, risks of potential fragmentation of global payment systems continued to emerge. Some countries increasingly sought to use units other than the major invoicing currencies for international trade as well as alternatives to traditional cross-border payment systems.
