of confidence in the stability - oriented macroeconomic policies of the euro area. conclusions summarising almost two years of experience with the euro, one might consider that it has started playing an international role in line with the economic and financial size of the euro area in a rather smooth manner. as i have highlighted today, developments in the international use of the euro are, of course, only gradual. nevertheless, looking ahead, one can expect the international role of the euro to develop further. an established track record of the eurosystem with reference to its primary objective of price stability and continuing integration of financial markets in the euro area will undoubtedly contribute to the further internationalisation of the euro.

international currency. this encompasses the use of the euro for official reserve holdings and as a reference currency for exchange rate arrangements. statistics related to official reserves were published in the most recent international monetary fund annual report, and indicated that the share of the euro was around 13 % at the end of 1999. this is comparable with the weight of the legacy currencies one year earlier. the fact that stability is prevailing is consistent with the notion that central banks tend to be conservative in managing their reserve holdings. remaining in the sphere of international official reserves, the international monetary fund has recently decided on a new valuation method for the special drawing rights ( sdrs ), which comes into force on 1 january 2001. the sdr basket traditionally comprised five currencies of individual countries, including the deutsche mark and the french franc. the weight of each currency in the basket was determined on the basis of trade and financial data of these countries. in order to reflect the new economic area resulting from the introduction of the euro, the sdr basket will henceforth include the euro, instead of the deutsche mark and the french franc. its weight will be based on the importance of the euro area as a single economic entity. similarly, the euribor will be substituted for the german and french national interest rates in the determination of the sdr ’ s interest rate. these modifications underscore how the official international financial community is gradually adjusting to the new reality of the euro. as a last point, let me deal with the use of the euro as a reference currency for exchange rate regimes adopted by third countries. today, over 50 countries are managing exchange rate arrangements that include a reference to the euro. this involves a variety of regimes, ranging from very tight pegs ( ie currency boards ) to managed floating policies. geographically, these countries are located on the european and african continents. this is a difference with the us dollar, which is also used by a few countries outside the western hemisphere. the intensive trade and financial links with the euro area are the main factor behind the choice of the euro in the definition of exchange rate policies. for some countries, the european union accession process provides an additional impetus to select an exchange rate arrangement based on the euro. i should highlight that the choice of a euro - based exchange rate arrangement is a unilateral decision, and does not involve any commitment on the part of the ecb. however, this use of the euro as a reference currency may be seen as a sign