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Currencies related to the euro

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Worldwide use of the euro and the U.S. dollar:
  Eurozone
  External adopters of the euro
  Currencies pegged to the euro
  Currencies pegged to the euro w/ narrow band
  United States
  External adopters of the US dollar
  Currencies pegged to the US dollar
  Currencies pegged to the US dollar w/ narrow band

Currently there are several currencies pegged to the euro, some with fluctuation bands around a central rate and others with no fluctuations allowed around the central rate. This can been seen as a safety measure, especially for currencies of areas with weak economies, as euro is seen as a stable currency and therefore would prevent collapse of currencies pegged to it, unless the euro itself were to collapse or the country were to run out of euros to exchange for their currency.

A few currencies remain pegged to the euro by virtue of the fact they were already pegged to one of the predecessors to the euro before the euro's introduction. The French franc and the German mark were the most widely used pre-euro currencies for pegging.

Currencies pegged to the euro


Currency Code Units per euro Band Pegged Since EMU Remarks
B&H konvertibilna marka BAM 1.95583 1 January 1999 Formerly pegged to the German Mark (since November 21 1995) at par, hence same rate as DEM to EUR
Bulgarian lev BGN 1.95583 1 January 1999 Formerly pegged to the German Mark (since July 5 1999) at par, hence same rate as DEM to EUR
Cape Verdean escudo CVE 110.265 1 January 1999 Formerly pegged to the Portuguese escudo (since 1998) at 1 PTE = 0.55 CVE
Danish krone DKK 7.46038 2.25% 1 January 1999 ERM II
Estonian kroon EEK 15.6466 15%[1] 1 January 1999 ERM II Formerly pegged to the German Mark (since April 1992) at 1 DEM = 8 EEK, therefore the rate is 1.95583 × 8
Hungarian forint HUF 282.36[2] 15% 4 May 2001 The forint has been allowed to strengthen (it was at 252.9 Ft/€ on Dec 18, 2006), although it still must stay within the 15% band.
Comorian franc KMF 491.96775 1 January 1999 Formerly pegged to the French franc (since 23 November 1979), at the end it was 1 FRF = 75 KMF, therefore the rate is 6.55957 × 75
Lithuanian litas LTL 3.45280 15%[1] 2 February 2002 ERM II
Latvian lats LVL 0.702804 15% 1 January 2005 ERM II The lats floats within a ±1% margin in practice
Moroccan dirham MAD ≈ 10.0[3] 1 January 1999
Pacific franc XPF ≈ 119.332 1 January 1999 Formerly pegged to the French franc (since September 1949), at the end it was 1 XPF = 0.055 FRF (⇔ 1€ ≈ 119.2649 XPF). Rate redefined (XPF slightly weakened) at 1 XPF = 0.00838 €
Slovak koruna SKK 38.455[4] 15% 28 November 2005 ERM II The Slovak koruna has been allowed to strengthen (it was at 34.91 Sk/€ on Dec 18, 2006), although it still must stay within the 15% band.[5]
35.4424[6] 15% 17 March 2007 ERM II The rate was readjusted.
Central African CFA franc XAF 655.957 1 January 1999 Formerly pegged to the French franc (since October 17 1948), at the end the rate was 1 FRF = 100 XAF, therefore the rate is 6.55957 × 100
West African CFA franc XOF 655.957 1 January 1999 Formerly pegged to the French franc (since October 17 1948), at the end the rate was 1 FRF = 100 XOF, therefore the rate is 6.55957 × 100

Notes

The Bulgarian Lev is pegged to the euro through a currency board. Estonia and Lithuania joined ERM II on 28 June 2004, Cyprus, Latvia and Malta joined on 2 May 2005; these currencies had been pegged to the Euro before joining ERM II. Malta was pegged to a basket of currencies where the Euro had a 70% weighting. As part of ERM II, the currencies have a fluctuation band of ±15%. However, some states have committed to a tighter fluctation band.

Convertible mark is the currency of Bosnia and Herzegovina and it was fixed to 1 German mark when it was introduced on the basis of the Dayton agreement; consequently after introduction of the euro, the Convertible mark uses the German-mark-to-euro rate at 1.95583 BAM per euro.

A number of other currencies are related to the euro in the manner without being actually pegged to it or officially restricted to a certain fluctuation margin. For example, the Pound sterling has in recent years hovered around £0.68 per euro. The Swiss franc has in recent years hovered around 1.55 CHF per euro and the Croatian kuna around 7.35 HRK per euro. Several other currencies of countries in the vicinity of the Eurozone (the Moroccan dirham being one) have been virtually pegged to the euro, usually in an effort to control inflation by the respective national banks. Some of these actually track the euro more closely than a couple of currencies which are officially pegged, namely the Slovak Koruna, which have been allowed to strengthen due to strong foreign investment, exports, and economic growth. [2]

References

  1. ^ a b These currencies do not use their fluctuation bands and stay at the central rate constantly.
  2. ^ Between 4 May 2001 and 4 June 2003 the central rate was 276.1 HUF per euro [1].
  3. ^ The Moroccan dirham is pegged to the euro, it fluctuates around €1=MAD10, however unlike the other currencies that fluctuate, the Moroccan dirham does not have an official fluctuation band.
  4. ^ "Slovak Koruna Included in the ERM II". National Bank of Slovakia. 2005-11-28. Retrieved 2007-03-17. {{cite news}}: Check date values in: |date= (help)
  5. ^ European Central Bank
  6. ^ Radoslav Tomek and Meera Louis (2007-03-17). "Slovakia, EU Raise Koruna's Central Rate After Appreciation". Bloomberg. Retrieved 2007-03-17. {{cite news}}: Check date values in: |date= (help)
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