×

ECB: Role of the euro is slipping

Jim Dyson | Getty Images

The euro's importance as a tool of the global financial system is dwindling, according to the European Central Bank.

The euro has struggled to keep pace as a globally used currency in the face of low interest rates and poor global growth.

At 19.9 percent, the share of the euro in foreign exchange reserves has hit its lowest level since 2000 according to the ECB's annual report on the currency's role.

"Moreover, the share of the euro in foreign exchange reserves has fallen by almost three percentage points since its peak in 2009, i.e. before the onset of the euro area sovereign debt crisis," the ECB said in the annual report released Wednesday.

"The euro remained the second-most important currency in the international monetary system, but with a significant gap to the U.S. dollar," the ECB added.

As a comparison the U.S. dollar makes up 64 percent of FX reserves, but according to IMF and ECB calculations is also falling, down by 5 percent since 2007.

Following the announcement of the ECB asset purchase program, use of the euro in foreign currency debt issuance peaked in early 2015, but has since faded as levels of dollar-denominated debt rose.

For cross-border loans, the use of the euro actually ticked up in 2015 but the report said volumes remained limited outside of the European Union.