U.A.E. to sell dollars for euros
The United Arab Emirates plans to convert 8
percent of its foreign-exchange reserves to euros from dollars before September,
the latest sign of growing global disaffection with the weakening U.S.
currency.
The Oil Patch Boys and their politician flunkys will be the last to admit it; but, this announcement sends an icy chill down their spineless backs. It hasn’t happened in the Middle East since some dude named Hussein did it a few years back.
The United Arab Emirates plans to convert 8 percent of its foreign-exchange reserves to euros from dollars before September, the latest sign of growing global disaffection with the weakening U.S. currency.
The U.A.E. has started, “in a limited way,” to sell part of its dollar reserves, the governor of the country’s central bank, Sultan Bin Nasser al-Suwaidi, said in an interview. “We will accumulate euros each time the market appears to dip” as part of a plan to expand the country’s holding of euros to 10 percent of the total from the current 2 percent.
The Gulf state is among oil producers, including Iran, Venezuela and Indonesia, looking to shift their currency reserves into euros or sell their oil, which is now priced in dollars, for euros. The total value of the reserves held by the U.A.E. is $24.9 billion, Suwaidi said.
Fears that the dollar’s level is unsustainable because of the heavy indebtedness of the United States to other countries is also behind the weakness this year, analysts said.
I wonder if converting Petrodollars to PetroEuros constitutes a Weapon of Massive Disruption?
Posted: Thu - December 28, 2006 at 04:33 PM