Eurocurrency is the domestic currency of a country that is deposited in another country. It may be deposited in a branch of a domestic bank, a foreign bank or a special “offshore” facility called an international banking facility (IBF). They can have maturities ranging from overnight up to a year. Deposits for longer than three months are called Euro Certificates of Deposits (Euro CD’s). Eurocurrencies serve two purposes: 1) they are an efficient and convenient market device for holding excess liquidity and 2) they provide a major source of short term financing for working capital, imports and exports.

While Eurocurrency loans generally have a maturity of less than one year, loans of one year or longer are also available in Eurocurrencies. These loans are called Eurocredits.