That was a weird day for many traders watching Bloomberg currency ticker featuring a post-euro …Drachma. A blinking XGD code. However those typing the code could not get much information. “The test was visible to a few customers” Bloomberg said in a statement explaining that it had tested a number of different contingency scenarios. Later the Greek Drachma code was removed from the ticker – maybe out of fear the tets could crash stock exchanges.
Greek government described the move as ‘market speculation’.
Bloomberg Tests Post-Euro Greek Drachma
It’s gone now but foreign exchange dealers for a time Friday were shocked to see a brand new currency appearing on their Bloomberg screens: a post-euro drachma.
The news set the trader grapevine and Twittersphere ablaze with speculation the financial news provider feared the worst ahead of Greece’s June 17 elections and was preparing for a Greek exit from the euro zone.
“Bloomberg carries out contingency planning exercises in the normal course of business. In accordance with this, Bloomberg has planned for a number of different scenarios across all our businesses including individual sovereign default scenarios and changes of currency for individual sovereigns,” Bloomberg L.P. said in a statement.
“As part of this testing process, a test identifier was briefly visible to a few customers,” it said
By typing XGD on their screens–rather than the GRD legacy code of the erstwhile Greek drachma–Bloomberg users were briefly able to see, among the options listed, a spot exchange rate for a post-euro Greek drachma. (Wall Street Journal Blog)
When the Euro was introduced in 2000, one Greek Drachma was equivalent to 0.0029 Euro.
“Similar tests on former domestic currencies of eurozone member countries were carried on most electronic trading platforms over the last weeks, and confirmed by interdealer broker Icap among the others,” says InvestmentEurope.
A Spanish Peseta, for example?
Greek Government Reaction
Greek government reacted a couple of hours later on Friday and government spokesman Dimitris Tsiodras commented:
“Some people seem to rush to take Greece out of the euro. Whether due to amateurism or to feasibility. However the currency is primarily the choice of the Greek people, not the markets. Also European partners at every opportunity reiterate their wish that Greece remains in the eurozone. Keep cool. We have seen already many times simulation exercises to be converted into speculation movements.”