OPEC Doesn't Have to Worry About the Declining Dollar

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The NYT lists the issues troubling OPEC as it meets this weekend and includes the falling dollar: "the dollar, the currency usually used in oil trading, is falling," While it's true that the dollar is falling, this need not be a concern for OPEC. OPEC has no obligation to trade oil in dollars (except where it has long-term contracts that have a price specified in dollars) and it has no obligation to hold dollars even if it trades its oil for dollars. If OPEC countries are being hurt by holding dollars then this is simply due to the stupidity of its money managers. They can readily protect themselves from the falling dollar, if they choose to do so.

--Dean Baker

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