Post on 29-May-2018
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BIRTH OF EURO AND ITSIMPACT ON
INTERNATIONAL TRADE
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European Steel
and Coalcommunity
Rome Treatycreating EEC
Maastricht Treaty
creating EU
v olut ion o f thevol ut ion o f theu rop ean Un io nur ope an Un io n
http://upload.wikimedia.org/wikipedia/en/e/e9/Schuman_Declaration.jpg8/8/2019 EURO Birth and Impact on Int Trade
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ormation of the EU
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REATIES TIMELINE
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ormation of the EMU
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RITERIA TO JOIN EMU
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TABILITY GROWTH PACT
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IRTH OF EURO
3 stages of EMU3 stages of EMU
Currency of EMUCurrency of EMU
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HY WAS THE EURO INTRODUCED?
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Administration
istered by the Frankfurt-based European Central Bank (ECB) and the Eurosystem (com
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COINSided into 100 cents (sometimes referred to as euro-cents, especially when distinguishing
c, 10c, 5c, 2c, and 1c denominations
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ANK NOTES
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IRECT AND INDIRECT USAGE6 Member States ofhe European Union usehe euro as theircurrency
, , ,Belgium Germany Ireland
, , ,Greece Spain France, , ,Italy Cyprus Luxembourg, ,Malta The Netherlands
, , ,Austria Portugal Slovenia,Slovakia Finland
-on participants, ,Bulgaria Czech Republic, , ,Denmark Estonia Latvia, , ,Lithuania Hungary Poland
,Romania Sweden and theUnited Kingdom
IRECT USAGE
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IRECT AND INDIRECT USAGENDIRECT USAGE
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THE EURO IN GLOBALMARKETS
International TradeDerivatives Market
OTC Interest rate Derivatives
Debt Securities MarketForeign Exchange Reserve
Disclosed Currency Composition
Stability of Exchange rates
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Share in International Debt Market
Narrow and Global MeasureNarrow: Only Offshore
Global: Both Domestic as well as Offshore
Constant as well as Current rate
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Observation
Share of the euro remained relatively stableFrom 27% in 1999 to 30% in 2009 ( Global
Measure)
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Share in Global Foreign ExchangeReserves
IMFs Currency Composition of OfficialForeign Exchange Reserves (COFER)database (COFER is an IMF database that keeps end-of-period
quarterly data on the currency composition ofofficial foreign exchange reserves)
Reserve buffers may have been useful inmany vulnerable emerging market
countries during the crisis.
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Analysis
Share of Undisclosed reserves, whichinclude Currencies of China, Australia,India etc
Drastic fall in reserves of US$, but theundisclosed reserves can be in form ofUS$Also due to depreciation of US$
Also the rise in EURO could be because ofDepreciation of US$.
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Share in International Derivatives
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: :Source BIS Quarterly Review'
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Exchange Rates
Source: Oanda.com
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Source: Oanda.com
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Analysis
1999-2002: Depreciation in Eurohigher growth rate of money in the EU
higher rate of capital accumulation
higher interest rates in the US
Post 2002: Appreciation in Eurocoins were finally withdrawn from use
Euro as medium of exchange, Store of value
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International Use of Euro
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1
8
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Factors that suits a currency forinternational currency status
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T a b l e 1 :
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Continued
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PRESENTED BY:Aaakriti Kakkar (91001)Aditi Bindlish (91003)Ankit Gupta (91006)Madhusudan Partani (91029)