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Portugal joined the european single currency, the euro (EUR) at its inception in 1999. In line with European policies, Portugal does not restrict inflows or outflows of capital, whether it’s related to remittances, trade or investment, having deregulated all individual and business forex transactions between residents and non-residents.
While there are no limits to the amounts that can be transferred to or from Portugal, All transactions between residents, and all payments made and/or received on resident accounts held abroad that exceed EUR50,000 must be reported to the central bank, Banco de Portugal. Foreign exchange accounts and domestic currency accounts can be held by residents both domestically and abroad. Resident euro accounts are convertible into foreign currency. Non-resident bank accounts are permitted in both foreign currency and euro, and non-resident domestic currency accounts can be held abroad
There are no restrictions on the amount of hard currency that may be brought in or out of Portugal; however, in line with EU legislation on anti-money laundering and terrorism financing, any amount equivalent to or higher than EUR10,000 must be declared to customs authorities.
The creation of monetary union resulted in the adoption of a single regional monetary policy set by the European Central Bank (ECB). Portugal’s central bank, the Banco de Portugal, retains oversight of the Portuguese financial system, ensures the stability of foreign exchange reserves, and monitors the function of the banking sector, other financial service providers, and payment systems.
Portugal joined the European Union in 1986 and was one of 12 inaugural members of the euro common currency zone (eurozone) in 1999. Portugal also joined the Schengen area, which allows for unrestricted cross-border movement, in 1991.
Annual GDP growth was above the European average for much of the 1990s, but its economic growth slowed in the 2000s, and Portugal was one of the countries that was hardest hit by the global economic downturn and the eurozone crisis after 2008. Public and private indebtedness has risen sharply, and Portugal’s public debt as a proportion of GDP hit 129.4% in 2013, the third-highest rate in the EU after Greece (177.3%) and Italy (132.7%).
Portugal was one of five countries, including Greece, Ireland, Italy and Cyprus, to receive a financial stimulus programme from the EU and International Monetary Fund (IMF). Since May 2011, the government has introduced austerity measures such as public spending cuts and increased taxation, which have helped to put the economy on stronger footing. Nonetheless, indebtedness remains particularly high and the central bank has significantly lowered interest rates in an effort to encourage economic growth.
On Portuguese exchange platforms, the US dollar (USD) and the euro represent the vast majority of currency trades. According to the most recent survey from the Bank for International Settlements, the USD was the most frequently traded currency in Portugal (US$3.1bn per day in April 2013), followed closely by the euro (US$2.93bn/day). Small amounts of other currencies such as Swiss franc, are also traded.
The euro is made up of 100 cents. Euro banknotes are printed in denominations of EUR5, EUR10, EUR20, EUR50, EUR100, EUR200 and EUR500. Coins are available in values of 1, 2, 5, 10, 20 and 50 cents, and EUR1 and EUR2. Each member country’s central bank issues its own banknotes and coins; the latter have national designs on one side and common designs on the other. All euro currency from any country is accepted within the currency zone.
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