Interest in the euro as a reserve currency is growing and the single currency is increasingly being viewed as an alternative to the U.S. dollar, the chief financial officer and Member of the Management Board of the European Stability Mechanism and European Financial Stability Facility said on Tuesday.
Europe’s single currency has rallied in recent months, boosted by signs of solidarity in the face of the COVID-19 crisis and the establishment of a recovery fund to help those countries hit hardest by the pandemic.
Kalin Anev Janse, CFO at euro zone rescue fund the ESM, said he has seen an increase in interest in the euro as a reserve currency and that interest has been reflected in strong demand from global central banks at recent bond sales.
“Central banks globally and reserve managers don’t believe in the thesis of euro break up anymore and see the euro more and more as a strong alternative to the dollar,” he said during an online panel at the Association for Financial Markets in Europe’s government bond conference.
The ESM uses the funds it raises on markets through bond issuance to lend at low interest rates to euro zone countries in financial trouble.