Currencies related to the euro
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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.
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[edit] Currencies pegged to the euro
| Currency | Code | Units per euro | Band | Pegged Since | EMU | Remarks |
|---|---|---|---|---|---|---|
| Bosnian Convertible mark | BAM | 1.95583 | 22 June 1999 | Pegged to the German mark at rate 1:1, hence same rate as DEM to EUR | ||
| Bulgarian lev | BGN | 1.95583 | 1 January 1999 | Pegged to the German mark at rate 1:1, hence same rate as DEM to EUR | ||
| Cape Verdean escudo | CVE | 110.265 | 1 January 1999 | Pegged to the Portuguese escudo at 1 PTE = 0.55 CVE rate | ||
| Cypriot pound | CYP | 0.585274 | 15% | 1 January 1999 | ERM II | |
| Danish krone | DKK | 7.46038 | 2.25% | 1 January 1999 | ERM II | |
| Estonian kroon | EEK | 15.6466 | 15%*** | 1 January 1999 | ERM II | Pegged to the German mark at rate 8:1, therefore the rate is 1.95583 * 8 |
| Hungarian forint | HUF | 282.36* | 15% | 4 May 2001 | ||
| Comorian franc | KMF | 491.96775 | 1 January 1999 | |||
| Lithuanian litas | LTL | 3.45280 | 15%*** | 2 February 2002 | ERM II | |
| Latvian lats | LVL | 0.702804 | 15%*** | 1 January 2005 | ERM II | |
| Moroccan dirham | MAD | 10.0** | 1 January 1999 | |||
| Maltese lira | MTL | 0.429300 | 15%*** | 2 May 2005 | ERM II | |
| Slovenian tolar | SIT | 239.640 | 15% | 28 June 2004 | ERM II | to be replaced by the euro on 1 January 2007 |
| Slovak koruna | SKK | 38.455 | 15% | 28 November 2005 | ERM II | [1] |
| Central African CFA franc | XAF | 655.957 | 1 January 1999 | Pegged to the French franc at rate 100:1, therefore the rate is 6.55957 * 100 | ||
| West African CFA franc | XOF | 655.957 | 1 January 1999 | Pegged to the French franc at rate 100:1, therefore the rate is 6.55957 * 100 | ||
| Pacific franc | XPF | 119.332 | 1 January 1999 | Rate defined as 1 franc = 0.00838 € |
* Between 4 May 2001 and 4 June 2003 the central rate was 276.1 HUF per euro [1].
** 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.
*** These currencies do not use their fluctuation bands and stay at the central rate constantly.
[edit] 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; subsequently morphed into fixing 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 Swiss franc has in recent years hovered around 1.55 CHF per euro. The Croatian kuna has hovered around 7.35 HRK per euro. Several other currencies of countries in the vicinity of the Eurozone have been virtually pegged to the euro, usually in an effort to control inflation by the respective national banks.
