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Euro Birth and Impact on International Trade
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Presentation on Birth of Euro, and Its impact on Global reserves. Also has analysis on Is it posible for Euro to replace Dollar as Global Currency....

Presentation on Birth of Euro, and Its impact on Global reserves. Also has analysis on Is it posible for Euro to replace Dollar as Global Currency.

Presentad By Students of FMG 18 A ( Aakriti kakkar, Aditi Bindlish, Ankit Gupta, Madhusudan Partani and Pragati Saraf of FORE School of Management, New Delhi)

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Euro Birth and Impact on International Trade Presentation Transcript

  • 1. BIRTH OF EURO AND ITS IMPACT ON INTERNATIONAL TRADE
  • 2. Albania
    Austria
    Belarus
    Belgium
    Bos.& Herz.
    Bulgaria
    Croatia
    Cyprus
    CzechRep.
    Denmark
    Estonia
    Finland
    France
    Germany
    Greece
    Hungary
    Iceland
    Italy
    Latvia
    Lithuania
    Luxembourg
    Mac.
    Malta->
    Moldova
    Mont.
    Netherlands
    Norway
    Poland
    Portugal
    Romania
    Russia
    Serbia
    Evolution of the European Union
    European Steel and Coal community
    Rome Treaty creating EEC
    Maastricht Treaty creating EU
  • 3. Formation of the EU
  • 4. TREATIES TIMELINE
  • 5. Formation of the EMU
  • 6. CRITERIA TO JOIN EMU
  • 7. STABILITY GROWTH PACT
  • 8. BIRTH OF EURO
    3 stages of EMU
    Currency of EMU
  • 9. WHY WAS THE EURO INTRODUCED?
  • 10. Administration
    The Euro is managed and administered by the Frankfurt-based European Central Bank (ECB) and the Eurosystem (composed of the central banks of the eurozone countries).
  • 11. COINS
    The euro is divided into 100 cents (sometimes referred to as euro-cents, especially when distinguishing them from other currencies).
    €2, €1, 50c, 20c, 10c, 5c, 2c, and 1c denominations
  • 12. BANK NOTES
  • 13.
  • 14. DIRECT AND INDIRECT USAGE
    DIRECT USAGE
    16 Member States of the European Union use the euro as their currency
    Belgium, Germany, Ireland, Greece, Spain, France, Italy, Cyprus, Luxembourg, Malta, The Netherlands, Austria, Portugal, Slovenia, Slovakia, Finland
    Non-participants
    Bulgaria, Czech Republic, Denmark, Estonia, Latvia, Lithuania, Hungary, Poland, Romania, Sweden and the United Kingdom
  • 15. DIRECT AND INDIRECT USAGE
    INDIRECT USAGE
  • 16. THE EURO IN GLOBAL MARKETS
    International Trade
    Derivatives Market
    OTC Interest rate Derivatives
    Debt Securities Market
    Foreign Exchange Reserve
    Disclosed Currency Composition
    Stability of Exchange rates
  • 17. Share in International Debt Market
    Narrow and Global Measure
    Narrow: Only Offshore
    Global: Both Domestic as well as Offshore
    Constant as well as Current rate
  • 18.
  • 19.
  • 20. Observation
    Share of the euro remained relatively stable
    From 27% in 1999 to 30% in 2009 ( Global Measure)
  • 21. Share in Global Foreign Exchange Reserves
    IMF’s Currency Composition of Official Foreign Exchange Reserves (COFER) database
    (COFER is an IMF database that keeps end-of-period quarterly data on the currency composition of official foreign exchange reserves)
    Reserve buffers may have been useful in many vulnerable emerging market countries during the crisis.
  • 22.
  • 23.
  • 24.
  • 25. Analysis
    Share of Undisclosed reserves, which include Currencies of China, Australia, India etc…
    Drastic fall in reserves of US$, but the undisclosed reserves can be in form of US$
    Also due to depreciation of US$
    Also the rise in EURO could be because of Depreciation of US$.
  • 26. Share in International Derivatives
  • 27. Source: BIS Quarterly Review: 'June 2010
  • 28.
  • 29. Exchange Rates
    Source: Oanda.com
  • 30. Source: Oanda.com
  • 31. Analysis
    1999-2002: Depreciation in Euro
    higher growth rate of money in the EU
    higher rate of capital accumulation
    higher interest rates in the US
    Post 2002: Appreciation in Euro
    coins were finally withdrawn from use
    Euro as medium of exchange, Store of value
  • 32. International Use of Euro
  • 33.
  • 34. Factors that suits a currency for international currency status
  • 35.
  • 36. Continued…
  • 37.
  • 38.
  • 39. PRESENTED BY:
    AaakritiKakkar (91001)
    AditiBindlish (91003)
    Ankit Gupta (91006)
    MadhusudanPartani (91029)
    Pragati Saraf (91040)