http://www.ft.com/cms/s/18338034-95ec-11db-9976-0000779e2340.html
Euro notes cash in to overtake dollar
By Ralph Atkins in Frankfurt
Published: December 27 2006 22:07 | Last updated: December 27 2006
22:07
The US dollar bill=E2=80=99s standing as the world=E2=80=99s favourite form=
of cash
is being usurped by the five-year-old euro.
The value of euro notes in circulation is this month likely to exceed
the value of circulating dollar notes, according to calculations by the
Financial Times. Converted at Wednesday=E2=80=99s exchange rates, the euro
took the lead in October.
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The figures highlight the remarkable growth in euro notes since their
launch on January 1 2002, three years after the start of Europe=E2=80=99s
monetary union, which in January welcomes its 13th member =E2=80=93 Sloveni=
a,
the former Yugoslav republic.
=E2=80=9CAfter the launch, we expected growth to stabilise =E2=80=93 but it=
has
continued over five years,=E2=80=9D Antti Heinonen, head of the European
Central Bank=E2=80=99s bank notes directorate, told the Financial Times.
Although the ECB does not deliberately promote the international use of
the euro, it has become popular in official foreign exchange reserves
=E2=80=93 even if it is far from challenging the dollar=E2=80=99s lead as t=
he most
popular reserve currency.
News that euro notes are challenging the dollar may cheer eurozone
politicians =E2=80=93 even if it partly reflects the currency=E2=80=99s str=
ength
=E2=80=93 but it may have a dark side too. Fast growth in the highest
denomination notes, especially the =E2=82=AC500 note, has raised suspicions
that they are popular among criminals, although the ECB plays down this
factor.
By the end of October the $759bn-worth of US dollar notes in
circulation was only a fraction ahead of the value of euro notes,
converted at exchange rates at that time.
But since October the euro has risen strongly against the dollar and
this month the value of euro notes has risen to more than =E2=82=AC610bn, or
in excess of $800bn at the latest exchange rates. That level is
unlikely to have been beaten by the greenback.
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