Euro share of foreign currency credit reaches 28 percent
Foreign currency credit in US dollars and euros expanded in the first quarter of 2026, with euro debt growing 12 percent annually. According to the Bank for International Settlements, euro credit reached 5.1 trillion euros while dollar debt grew 7.3 percent to 14.7 trillion dollars.
Dollar dominance meets euro momentum
The Bank for International Settlements reported strong growth in foreign currency credit denominated in US dollars and euros during the first quarter of 2026.
Total US dollar-denominated foreign currency debt reached 14.7 trillion dollars by the end of March 2026, registering an annual expansion rate of 7.3 percent.
Emerging market and developing economies accounted for approximately 30 percent of this dollar stock.
In comparison, euro-denominated foreign currency credit expanded at a significantly faster annual rate of 12 percent over the same period, bringing the total outstanding euro debt to 5.1 trillion euros.
Borrowers in emerging market and developing economies held roughly 17 percent of the outstanding euro-denominated credit.
The steady shift toward euro borrowing
Although the total volume of euro-denominated foreign currency credit remains far smaller than dollar-denominated debt, the euro has experienced consistently faster growth across both global markets and emerging economies in recent years.
Between the third quarter of 2022 and the first quarter of 2026, the euro's share of global foreign currency credit rose from 22 percent to 28 percent.
In emerging market and developing economies, the euro share expanded from 14 percent to 18 percent.
The positive upward trend holds firm even when adjusting calculations for exchange rate fluctuations.
A quiet realignment in international debt
The accelerated expansion of euro debt points to a gradual diversification in global credit markets.
Yet with US dollar borrowing still three times larger, talks of euro dominance remain premature.
For emerging economies, expanding euro credit offers a valuable buffer against US rate volatility.