report from Merrill Lynch & Co has revealed that the government has effectively given Gulf Arab oil producers the go ahead to change their dollar-pegged foreign exchange policies, a move some experts fear will lead to a large scale abandonment of the greenback.
In a report entitled “U.S. Green Light for the Gulf Cooperation Council (GCC)”, the U.S. investment bank said the United Arab Emirates and Qatar will probably move to a currency basket in the next few months, with their respective currencies appreciating 5 percent before the end of the year, reports Reuters.
This may spur a similar move by the Saudis some time next year.
Merrill Lynch referred to a report to Congress by the Treasury which states that the government believes the dollar is strong enough to thrive without Gulf support. Gulf countries have suffered record levels of inflation in tandem with the dollar’s decline and soaring energy and food prices.
Filed under: Business | Tagged: Business, depression, dollar, dollar peg, euro, Iran, Iraq, OPEC, petrodollar, petroleum, Qatar, saudi arabia
