UAE might converts 5% of its monetary reserves to EURO

AN official in the office of the central Bank of the United Arab Emirates UAE said that the UAE might convert 5% of its reserves of foreign currencies from US dollars to EURO.

The governor of the Bank Sultan Nasser al-Sweidi said in June that the decrease of the US dollar, the currency used for oil pricing, resulted in higher inflation than expected which reached 5% in 2004.

The Bank announced in September 2004 that its assets and reserves reached $ 49.66 billion Dirham ( $ 13.52 billion), of which 98% are in dollars, while 42% of its foreign trade is finalized with Europe and is paid in EURO.

Worthy mentioning that the EURO exchange rate increased 60% against the dollar during the three past years. This however, raises expectations that central banks in the middle East will change its dealings from the deteriorating US dollar to the EURO.