The United Arab Emirates will convert 8 percent of its foreign-exchange reserves to euros from dollars before September after the U.S. currency slumped this year, the country’s central bank governor said.
The U.A.E. has started “in a limited way” to sell part of its dollar reserves, Sultan Bin Nasser al-Suwaidi said in an interview in Abu Dhabi on Dec. 24. “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 2 percent today, he said.
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 currently priced in dollars, in the 12-nation currency. The total value of the U.A.E.’s current reserves is $24.9 billion, 98 percent in dollars and 2 percent in euros, al-Suwaidi said.
This is what happens when you mismanage your economy; countries lose confidence in your currency and sell it. bonddad