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

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

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.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005

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References in periodicals archive

3962, "The Euro-currency Control Act of 1979," in order to "establish reserve requirements on certain Eurocurrency liabilities." (53) The bill was motivated by "the excessive growth in the Eurocurrency market, a disproportionate share of which [was] comprised of U.S.

The monetary fifth column: the Eurodollar threat to financial stability and economic sovereignty

dollar payment system, triggering systemic "dislocations in the international interbank sector of the Eurocurrency market" (Herring and Litan, 1995, p.

The role of time-critical liquidity in financial markets

Mean reversion of interest rates in the eurocurrency market, Oxford Bulletin of Economics and Statistics 63: 459-474.

Regime changes in monetary policy and the expectation hypothesis of the term structure in Turkey

2001: Mean reversion of interest rates in the Eurocurrency market. Oxford Bulletin of Economics and Statistics 63 (4): 459-473.

Does fisher hypothesis hold for the East Asian Economies? An application of panel unit root tests

In Section II, we provide a primer on the Eurocurrency market to formally establish the relevant questions.

Eurocurrency risk premia

"Mean Reversion of Interest Rates in the Eurocurrency Market," Oxford Bulletin of Economics and Statistics, 63, 4, 2001, pp.

Long memory in the interest rates in some Asian countries

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.

On the pervasive effects of Federal Reserve settlement regulations

Because the Eurocurrency market is so heavily concentrated in London, there is less likely to be a significant link between this measure of intermediation and domestic output in the United Kingdom when compared to Germany or the United States.

DYNAMIC EFFECTS OF FINANCIAL INTERMEDIATION OVER THE BUSINESS CYCLE

The IMF's original role as a provider of short term financing for maintaining fixed exchange rates was somewhat obviated by the growth of the Eurocurrency market in the 1960s.

Stasis and Change in the IMF and World Bank: International Context and Institutional Dynamics

9) explains the working of the eurocurrency market. The superiority of the dollar was thus not based on the international financial centre located in the USA, but on the fact that this country was the largest exporter and importer of the world and had technical advantages not only in manufacturing but in management and financial business, as the development of US multinationals suggests.

The internationalization of the yen: with an emphasis on East Asia