Greater use of the euro in global borrowing and trade could extend the European Central Bank’s influence beyond the currency area, Chief Economist Philip R. Lane said in Shanghai on Wednesday, Oct. 21.
Lane said tighter ECB policy could raise financing costs for overseas borrowers who rely on euros, potentially curbing demand abroad and feeding through to the euro-area economy. He also said wider use of the euro for trade invoicing could make import prices less sensitive to external shocks. Lane clarified that he was expressing his own assessment, not an agreed position of the ECB Governing Council.
The Eurosystem repo facility for central banks, known as EUREP, gives eligible monetary authorities outside the euro area a way to obtain euros against qualifying euro-denominated collateral. Each central bank’s credit line can reach €50 billion. Individual borrowing periods run from one day to one week, with extensions possible.
More than 30 central banks had expressed interest in the facility during the six months before Lane’s remarks. The first foreign central banks completed onboarding in early October, and Lane said they could draw on EUREP in the fourth quarter of 2026. The ECB’s February announcement set the revised framework to apply from the third quarter. It cited the risk that funding problems abroad could spill into euro-area markets.
Access has limits: EUREP requires euro-denominated collateral. The ECB’s separate swap lines can provide euros against local-currency collateral and carry greater risks for the central bank. FXStreet reported that Commerzbank analyst Thu Lan Nguyen cautioned that monetary policy’s reach is only one factor in price stability; economic structure, fiscal choices and shocks from abroad also affect inflation.
The euro accounted for 20.2% of global foreign exchange reserves in the fourth quarter of 2025, measured at constant fourth-quarter 2025 exchange rates, according to the ECB’s June 2026 review. The review also said deeper, more liquid European capital markets are needed to strengthen the euro’s international role. The ECB’s next monetary policy meeting is scheduled for Wednesday and Thursday, Oct. 28-29, with a press conference on Thursday, Oct. 29.
