European Central Bank: No Active Internationalization of Euro

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Last updated at: (Beijing Time) Thursday, December 13, 2001

European Central Bank: No Active Internationalization of Euro

A European Central Bank official said Thursday in Hong Kong that the bank would not pursue an active internationalization policy for the euro, though it would welcome the foreign countries' use of the currency for their own macroeconomic control.

Eugenio Domingo Solans, a member of the Executive Board of the bank said: "The Eurosystem has adopted it neutral stance. It will not pursue the internationalization of the euro as an independent policy goal, or hamper the use of the currency by non-(European Union) residents," he said.

Domingo was speaking at a seminar entitled "Euro: Its Arrival and Practical Implications" organized by Hong Kong's Trade Development Council. The seminar was held ahead of the physical introduction of euro into the market in the forms of notes and coins on 1 January 2002.

"The use of euro is mainly related to its function as an anchor currency. However, countries with currencies not pegged to the euro may also use it for intervention purposes," he said.

He stressed that the use of euro should remain the outcome of economic and financial developments and policies inside and outside of the euro area.

Tony Latter, deputy chief executive of the Hong Kong Monetary Authority, said, with 15 percent of Hong Kong's foreign exchange reserves being euro, it remains to be seen whether or not the Hong Kong SAR government will increase the euro portion.

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