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Oil producers diversify to euro, yen away from dollar

Russia and other oil-producing countries shifted their assets away from the dollar and into the euro and the yen in the Q2, the Bank of International Settlements said in its quarterly review.

Russia and members of the Organization of Petroleum Exporting Countries  (OPEC) decreased their dollar holdings to a two-year low of 65% of total holdings, from 67% in the Q1, the Basel, Switzerland-based bank said in a report on its Web site. Oil producers increased their euro deposits to 22% of their holdings in the Q2, up from 20% in the previous quarter, the BIS said.

The report may spur speculation the dollar will fall as central banks and investors diversify their foreign currency holdings. „While the data are not comprehensive, they do appear to indicate a modest shift over the quarter in the dollar share of reporting banks' liabilities to oil-exporting countries,” BIS analysts Ryan Stever, Goetz von Peter and Christian Upper wrote in the quarterly review. OPEC's 11 member nations are Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela. (Bloomberg)