Eurocredit

DEFINITION of 'Eurocredit'

A loan whose denominated currency is not the lending bank's national currency. A eurocredit loan would be made by a U.S. bank to a lender requiring a denominated currency which differs from the bank's local currency (USD) for specific reasons, most likely some sort of business operations or trade requirements. Despite the inclusion of the word "euro," a eurocredit is not immediately derived from the euro.

BREAKING DOWN 'Eurocredit'

Eurocredit helps the flow of capital between countries and the financing of investments at home and abroad. These trades add liquidity to both currencies as the U.S. bank accounts for the incoming payments from the loans in U.S. dollar terms, and are often large and function in a long-term basis. A U.S. bank lending a corporation 10 million Russian rubles is an example of Eurocredit.

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