Luxembourg - Money

Linking of its currency to that of Belgium in 1921 has helped Luxembourg maintain its financial stability. Despite the demand for labor, the government managed to keep inflation low through the 1990s. However, the Luxembourg franc has declined in relation to the U.S. dollar but has maintained its value against major European currencies. In 1995, 1 U.S. dollar was equal to 29.48 francs, but by 1999, 1 dollar equaled 34.77 francs. In 1999 Luxembourg joined the EU which created a single currency, the euro, for the EU nations. The exchange rate is fixed at a rate of 40.3399 francs per euro. Since its introduction, the euro has been weak against the dollar. In 2000, 1 U.S. dollar equaled 0.9867 euros.

Luxembourg's 200-plus national and international banks place few restrictions on operations and lend money to consumers and businesses around the world. There are no regulations on the transfer of funds or profits. Bank confidentiality, prompt payment of interest, and the Grand Duchy's political stability have combined to make Luxembourg a banking haven.

The Luxembourg Stock Market has also performed well since the 1980s. It lists over 15,000 international securities. In 1999, the total volume of trade was 1 trillion francs. By 1994, investment companies in the Grand Duchy had assets of over 100 trillion francs. Luxembourg

Exchange rates: Luxembourg
euros per US$1
Jan 2001 1.0659
2000 1.0854
1999 0.9386
1998 36.299
1997 35.774
1996 30.962
Note: Rates prior to 1999 are in Luxembourg francs per US$; the Luxembourg franc is at par with the Belgian franc, which circulates freely inLuxembourg.
SOURCE: CIA World Factbook 2001 [ONLINE].

GDP per Capita (US$)
Country 1975 1980 1985 1990 1998
Luxembourg 21,650 23,926 26,914 35,347 46,591
United States 19,364 21,529 23,200 25,363 29,683
Germany N/A N/A N/A N/A 31,141
Belgium 18,620 21,653 22,417 25,744 28,790
SOURCE: United Nations. Human Development Report 2000; Trends in human development and per capita income.

ranks fourth in the world for asset management and second in Europe.

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