FRANKFURT, June 25: The European Central Bank said on Monday that the international role of the euro has become differentiated, depending on the particular global market segment being looked at.

In its sixth annual review of the international role of the euro, published on Monday, the ECB found that “developments in the international use of the euro have differed across global market segments.” For example, the euro's international role has declined slightly in segments, such as international debt securities, international deposits and loans, foreign exchange and invoicing of goods imports.

At the same time, “in other segments it continued to show a significant degree of stability or a gradual expansion,” the report stated.

In the period from mid-2005 to the end of 2006, the euro share in the stock of international debt securities declined by around 2.5 percentage points to 31.4pc in December 2006, the ECB found.

That was mainly due to a large increase in the issuance of long-term bonds and notes denominated in US dollars, the guardian of the euro wrote.

In the international loan and international deposit markets, the single currency's shares also declined, falling by 1.5 percentage points and 3.0 percentage points respectively.

And in the foreign exchange markets, the euro's shares in daily settlements of forex trades via Continuous Linked Settlement fell to around 39pc during the period under review, compared with close to 41pc previously.

“This fall has to be interpreted against the background of an expansion in the number of currencies traded within CLS,” the ECB explained.

The yen and the pound also saw their market share decline for the same reason.

“By contrast, the US dollar share remained stable at around 93pc, reflecting the dominant role of the US dollar as a vehicle currency in global foreign exchange markets,” the report stated.

—AFP