A type of Eurocurrency that constitutes a dollar-denominated deposit made in a foreign bank or a foreign branch of a U.S bank. In other words, it refers to U.S dollars that are held in banks outside the United States. Sometimes, depositors prefer to transfer their money to European banks in the lookout for higher interest rates. However, Eurodollar deposits are often used for settling international transactions.
Examples of securities issued in Eurodollar include Eurodollar bonds, Eurodollar CDs, etc. The issuers of Eurodollar securities offer to pay interest in dollars deposited in foreign bank accounts.
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