June 14, 2022

• The euro remains the second most used currency worldwide after the US dollar
• The share of the euro is about 19% of the various indicators of the use of international currency
• The global appeal of the euro is linked to a stronger economic and monetary union

The international role of the euro remained stable in 2021, and its share of the various measures of international currency use was approximately 19% on average. This was one of the most important findings in the European Central Bank’s (ECB) annual review on the international role of the Euro published today.

“After the pandemic, the euro area has experienced one of the sharpest recoveries in its history, thanks also to generous financial and monetary policy support. We now face rising global inflation, driven by higher energy costs, supply bottlenecks and normalization of demand as economies reopen. All in all, however, this development has not led to a significant change in the international role of the euro,” ECB President Christine Lagarde said.

The share of the euro in the world’s foreign exchange reserves rose by 0.5 percentage points to 20.6 percent in 2021, and the share of the euro in international bonds increased by almost 3 percentage points to 24.6 percent. International loans and international deposits also grew clearly. However, the share of the euro in foreign exchange transactions decreased. The euro’s share of international debt securities and non-euro import and export invoicing remained fairly stable.

In the future, the international role of the euro will primarily be supported by a deeper and more complete economic and monetary union, including the promotion of the capital market union within the framework of a sound economic policy. The Eurosystem supports this policy and emphasizes the need for further efforts to complete economic and monetary union.

The interim edition of this year’s report contains five analysis boxes. Box 1 discusses the effects of the Russian occupation of Ukraine and economic sanctions against Russia on the international roles of the euro and the US dollar. “The Union’s economic and financial resilience against current geopolitical challenges can also support the euro’s international role,” said ECB President Christine Lagarde.

Box 2 describes recent developments in the international role of the Chinese renminbi. Box 3 provides insights into the international use of the euro as a financial currency in different economic sectors and over time. Box 4 examines the role of exchange rate flexibilities in foreign trade in the euro area and the role of the euro as an invoicing currency.

Finally, Box 5 examines the role of the euro in the global stablecoin market.

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