Eurocurrency market

Eurocurrency market

The money market for borrowing and lending currencies that are held in the form of deposits in banks located outside the countries where the currencies are issued as legal tender.

Eurocurrency Market

The market for investments denominated in currencies other than the one in which the investment is traded. For example, a eurodollar is a U.S. dollar deposit outside the jurisdiction of the Federal Reserve (that is, outside the United States). Eurodollar investments may be traded in any country other than the United States but are usually traded in London. Likewise, a euroyen is a yen deposit outside Japan, thought it usually refers to a euroyen CD. The eurocurrency market may also refer to the trading of eurocurrency bonds. It is important to note that term has nothing to do with the euro, and the prefix "euro-" is used more generally to refer to deposits outside the jurisdiction of the local central bank (e.g. "euroruble").

Eurocurrency market

or

Eurobond market

a MARKET based in Europe, comprising a web of international banks and money brokers, which is engaged in the borrowing and lending of FOREIGN CURRENCIES such as US dollars outside their countries of origin, as a means of financing trade and investment transactions.

The main instrument used in the Eurocurrency market to finance long-term investment is the Eurobond, a form of fixed interest security which is denominated either in a single currency or is syndicated with a lead' bank arranging with other banks a multi-currency loan package. Depositors of funds in the Eurocurrency market include commercial banks, companies and central banks, while borrowers for the most part are industrial and financial companies, particularly MULTINATIONAL ENTERPRISES, who use Eurofinance during times of domestic credit restrictions and/or when domestic interest rates are high in comparison with Eurocurrency rates. See LIBOR.

Eurocurrency market

or

Eurobond market

a market based primarily in Europe that is engaged in the lending and borrowing of US DOLLARS and other major foreign currencies outside their countries of origin to finance international trade and investment.

The main financial instrument used in the Eurocurrency market for long-term investment purposes is the Eurobond (see BOND), a form of fixed-interest security denominated in a particular currency or currencies. Depositers in the Eurocurrency market include commercial banks, industrial companies and central banks. Borrowers for the most part are companies that have resorted to Eurofinance during times of domestic credit restrictions and/or when domestic interest rates have been high in comparison to those prevailing in the Eurocurrency market. See FOREIGN EXCHANGE MARKET.

References in periodicals archive ?
53) The bill was motivated by "the excessive growth in the Eurocurrency market, a disproportionate share of which [was] comprised of U.
Mean reversion of interest rates in the eurocurrency market, Oxford Bulletin of Economics and Statistics 63: 459-474.
2001: Mean reversion of interest rates in the Eurocurrency market.
In Section II, we provide a primer on the Eurocurrency market to formally establish the relevant questions.
A multivariate cointegration analysis of interest rates in the Eurocurrency market, Journal of International Money and Finance, 16, 767-778.
Second, the rate pressure should be greater in overnight repo rates than overnight LIBOR because of the timing of the two markets: The brokered repo market is active during the afternoon in the United States, while the London LIBOR-based Eurocurrency market is closed.
The magnitude of the shocks can be explained by the combination of the dynamic Eurocurrency market and the fact that foreign-owned banks are often not subject to domestic regulation and can innovate and conduct business in a much less constrained manner.
Interest rates over the coming year are set in line with the implied rates in the Eurocurrency market, with base rates possibly falling to 6 per cent before starting to rise to around 6 1/2 per cent by the end of next year.
These branches are large net borrowers in the interbank Eurocurrency market and are by far the largest issuers of Euro-CDs.
Growth of Eurocurrency market, the problems related with its present form, and efficiency of foreign markets have also been examined.
In more efficient markets, such as the Eurocurrency markets, forward exchange rates are based on both current and future expectations of the interest rate differential.