OPEC members cut proportion of deposits held in dollars
Members of the world's crude oil cartel have been cutting back on US dollar-denominated holdings for three
years.
The Bank for International Settlements, in its latest quarterly report, notes members of the Organization of
Petroleum Exporting Countries have cut the proportion of deposits held in dollars from 75 % in the third quarter of
2001 to 61.5 %. And, in cash terms, OPEC members' stock of dollar-denominated deposits has fallen by 4 % since 2002,
the bank said.
The primary -- though by no means sole -- reason for the shift is the dollar's decline against the euro and the
Japanese yen. Because crude oil sales are typically denominated in dollars, a falling dollar cuts into OPEC
revenues.
But there are other reasons for the shift: Middle East investors are worried Washington will freeze assets in its war
on terror, especially since President Bush was re-elected, and OPEC members spend heavily in Europe and Japan where
the dollar's purchasing power is weakest.
