Eurodollar

Eurodollars is a financial term used to describe certain U.S. dollar-denominated deposit liabilities (primarily but not exclusively time deposits) held at banks or their branches outside the United States.

The term originated with U.S. dollar deposits held in European banks, but it has since expanded to include U.S. dollar-denominated deposits held at banks anywhere outside the United States. A deposit in a financial centre such as Dubai or Singapore, for example, is likewise considered a Eurodollar, though deposits held in certain Asian financial centres are also sometimes called Asiadollars. More generally, the euro- prefix can be used to indicate any currency held in a country where it is not the official currency, broadly termed "eurocurrency", for example, Euroyen or even Euroeuro. There is no connection with the euro currency of the European Union.

Eurodollars have different regulatory requirements than dollars held in U.S. banks. Eurodollars can be riskier than assets held in U.S. banks, which include at least partial deposit insurance, and as a result, demand a higher interest rate.

Eurodollars facilitate global trade and investment and liquidity.