Nostro Account

Every bank has accounts for each currency held in correspondent banks in the country of origin of the currency. These accounts are known as nostro accounts. For example, a bank located in New York will have a nostro account in a correspondent bank in Japan to receive yen. It will also have a nostro account in a correspondent bank in the UK to receive sterling.

Since euro can be received in any country within the euro area, banks can have euro-denominated nostro accounts in correspondent banks in Paris, Frankfurt, and so on.

A nostro account to one bank must simultaneously be a vostro account to another bank.
For example, if UK Bank maintains a dollar account with USA Bank in New York, the account would be a USD-denominated nostro account to UK Bank, but a vostro account in its home currency to USA Bank.
Similarly, if USA Bank maintains a GBP account with UK Bank in London, this would be a vostro account to UK Bank, but a nostro account to USA Bank.