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BISMILLAH

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PRESENTATION ON EURO

CURRENCYPRESENTED

BY

Omar Shahzad

Muhammad Nasir Khan

Rehmat Ullah

Laeeq Ur Rehman

Ubaid Ur Rehman

Ubaid Ullah

Adnan

Ejaz

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PROJECT CONTENTS

EXCHANGE RATES EURO THE TWELVE EUROPEAN COUNTRIES

HISTORY THE DEFINITIVE VALUES A NEW RESERVE CURRENCY THE EURO AND OIL

Euro Exchange Rate Against USD Advantagesofthe Euro

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Exchange rate = price, intermsof

one currency, at which another

currency can be bought A currency appreciates whenit

becomesmore expensive intermsof

another;the other currencydepreciates.

Whatare Exchange Rates?

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EURO

The euro(symbol: ;

banking code:EUR)

Itisthecurrency of

twelveEuropean Unionmemberstates

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The Twelve European Countries Austria Belgium Finland

France Germany Greece The Republic of Ireland Italy

Luxembourg The Netherlands Portugal Spain

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History The euro was established by the provisionsinthe 1992 Maastricht Treaty on EuropeanUnionthat wasusedto establish aneconomic andmonetary union

Official launch ofthe Euro 1 January, 1999

Cash changeovertothe Euro - 1 January,2002

The euroisadministered by the EuropeanSystemofCentral Banks (ESCB), composedofthe European Central Bank (ECB) andtheEurozone central banksoperatinginmemberstates

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Thedefinitive valuesineuroofthesesubdivisions (whichrepresenttheexchangeratesat whichthe currencyentered the

euro)areasfollows:

Country Rate Austria 13.7603 Belgium 40.3399

Finland 5.94573 France 6.55957 Germany 1.95583 Greece 340.750 Ireland 0.787564

Italy 1936.27 Luxembourg 40.3399 Netherlands 2.20371 Portugal 200.482 Spain 166.386

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A New Reserve Currency

The euro will probably become one ofthe majorglobal reserve currencies.

Currently, international currencyexchange isdominated by theAmericandollar.

Ifthe euro were to become areserve

currency it would benefit, membercountries by loweringontheirdebts.

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The Euroand Oil

The Eurozone consumesmore importedpetroleumthanthe United States. Thiswouldmeanthatmore eurosthan USdollars wouldflow intothe OrganizationofPetroleum Exporting Countries,(OPEC)nations, butoil is priced by those nationsinUS dollarsonly

There have beenfrequentdiscussionsatOPEC about pricingoil in euros, whichwould have various effects, amongthem,requiringnationsto holdstoresofeurostobuy oil, ratherthanthe US dollarsthattheyholdnow

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Euro Exchange RateAgainst USD

Afterthe introductionofthe

euro, its exchange rate againstother currencies, especially theUS dollar, declined heavily.

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Growth

Rate

Time

Y*

Business Cycle

Y* = Equilibrium Growth Rate

High Growth

Expansion

Low Growth

Recession

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Advantagesofthe Euro

Eliminationofexchange-ratefluctuations Transaction costs Priceparity

Increased tradeacross borders Increased cross-borderemployment Simplified billing Expanding marketsfor business Financial marketstability

Macroeconomic stability Lowerinterestrate Structuralreform for Europeaneconomies

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THANK YOU