UAE, Saudi considering to move reserves out of dollar

forex ^ | 3/18/06 | all-Gis-eara

[STD]

UAE, Saudi considering to move reserves out of dollar

WASHINGTON — A number of Middle Eastern central banks said on Tuesday they would seek to switch reserves from the US greenback to euros.

The United Arab Emirates said it was considering moving one-tenth of its dollar reserves to the euro, while the governor of the Saudi Arabian central bank condemned the decision by the United States to force Dubai Ports World to transfer its ownership to a ‘US entity,’ the UK Independent reported.

“Is it protectionism or discrimination? Is it okay for US companies to buy everywhere but it is not okay for other companies to buy the US?” said Hamad Saud Al Sayyari, the governor of the Saudi Arabian monetary authority.

The head of the United Arab Emirates central bank, Sultan Nasser Al Suweidi, said the bank was considering converting 10 per cent of its reserves from dollars to euros.

“They are contravening their own principles,” said Al Suweidi. “Investors are going to take this into consideration (and) will look at investment opportunities through new binoculars.”

The Commercial Bank of Syria has already switched the state’s foreign currency transactions from dollars to euros, Duraid Durgham head of the state-owned bank said. The decision by the bank of Syria follows the announcement by the White House calling on all US financial institutions to end correspondent accounts with Syria due to money-laundering concerns.

Syria’s Finance Minister Mohammad Al Hussein said: “Syria affirms that this decision and its timing are fundamentally political.”-Khaleej Times Online

[Echo Talon]

so, if they asked us to pay for the use of their ports i bet we would pay.

[AmeriBrit]

"Supply & Demand, who else has port facilities in the area that we can use? Answer nobody."

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Don't hold your breath waiting for an intelligent answer ET because they don't have one. They don't have the ability to tie it all in with our militaries use of the UAE ports.

[Echo Talon]

The UAE has an open economy with a high per capita income and a sizable annual trade surplus. Its wealth is based on oil and gas output (about 30% of GDP), and the fortunes of the economy fluctuate with the prices of those commodities. cia.gov

[Young Scholar]

I don't know foreign exchange economics well, but doesn't this make sense if we prevent them from investing in American assets? The restrictions we place should create a balance-of-payments surplus for them with us, meaning they will have less need for a reserve of US dollars. But many here will probably treat this as a hostile action.

[Echo Talon]

Compare that to Kuwait Petroleum accounts for nearly half of GDP, 95% of export revenues, and 80% of government income.

[Echo Talon]

and Saudi Arabia The petroleum sector accounts for roughly 75% of budget revenues, 45% of GDP, and 90% of export earnings. About 40% of GDP comes from the private sector.

[catholicfreeper]

So true. My brother works in Dubai. He was pretty horrified at how all this worked out. I guess it takes something like this to show the general ignorance of the American population as to foreign affairs and basic geography. We might have to eat some crow on this deal and how it was handled.

[Echo Talon]

I know, still fun to play with them. :)

[Kozak]

Fine. Let them pay us a toll on every barrel of oil for patrolling the Gulf, and when they need us to protect them from the Iranians, we should stick it to them for the service.

[Echo Talon]

why would they pay us to patrol the Gulf? We do that on our own.

[AmeriBrit]

"why would they pay us to patrol the Gulf? We do that on our own."

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The question must have been too hard and you stumped another one!
Chalk another win up in your column. LOL

[Echo Talon]

maybe he went to sleep. something i'm thinking about doing soon.

[Kozak]

Free rides over. Let them pay for the service. They benefit far more then we do from the patrolling. And they know it too. They would squeal like pigs if we pulled out, just like the Germans when we started to close bases. I'm sick of so called "allies" who whine and bitch when they don't get everything their way. If the UAE doesn't think it's in their strategic interest to be our allies fine, they can go f themselves. How long is capital going to flow into their Middle East "Hong Kong", a stones throw from the insane Iranians if it's stripped of our protection?

[Echo Talon]

Free rides over. Let them pay for the service. They benefit far more then we do from the patrolling. And they know it too. They would squeal like pigs if we pulled out, just like the Germans when we started to close bases. I'm sick of so called "allies" who whine and bitch when they don't get everything their way. If the UAE doesn't think it's in their strategic interest to be our allies fine, they can go f themselves. How long is capital going to flow into their Middle East "Hong Kong", a stones throw from the insane Iranians if it's stripped of our protection?

It is in OUR interest to patrol those waters, 25% of the worlds oil goes though the Straight of Hormuz, you think $60 per barrel is bad. Imagine if that were more like $90+per

[AmeriBrit]

Sleep...Mmmmmm! I can think about it but can't act on it yet. Been playing too much and got to catch up on a mountain of work first......yawn!.....Since joining FR my priorities have got all screwed up, but must admit it's a lot more fun.LOL
Goodnite, have restful sleep.

[Kozak]

Yeah it's in our interest, but EVEN MORE in theirs. Who do you think is getting the 60 bucks per? And those little toads know it too. If we called their bluff they would be BEGGING us to come back.

[Echo Talon]

captainsquartersblog.com
Iran controls the traffic through the Straits of Hormuz, a vital passage for a significant amount of the world's oil exports. If the Iranians shut down the strait, the price of oil could explode, shaking the world economy and perhaps even touching off trade wars and other conflicts.

By the way, the country that shares the sovereignty of the Straits of Hormuz is the United Arab Emirates. And one of the reasons why the US felt that Dubai is such a strong ally is because the UAE allows the US Navy to base its operations for the security of that passage in the UAE. That alliance may soon become critical in defending the flow of oil from other sources in the area; hopefully it will survive long enough for us to face down Iran in the Straits.

[Echo Talon]

me too, i'm fixin to go to bed. my eyes are starting to burn... 8) g-nite all

[Echo Talon]

Yeah it's in our interest, but EVEN MORE in theirs. Who do you think is getting the 60 bucks per? And those little toads know it too. If we called their bluff they would be BEGGING us to come back.

Why, then they would be getting $90+/per, look at a map of the UAE they are not totally dependant on the Straight. They could export straight into the Gulf of Oman.

[Vectorian]

'In the end, America won.'

By keeping your ports British run?