OPEC weighing non-dollar cash reserve proposal

Mumbai: Members of the Organisation of Petroleum Exporting Countries (OPEC) have expressed interest in converting their cash reserves into a currency other than the depreciating US dollar, Iranian president Mahmoud Ahmadinejad said, adding, the dollar is now a "worthless piece of paper."

His comments came at the end of a summit of the 13-member OPEC heads of state after US ally Saudi Arabia refused to air concerns about the falling dollar in the summit`s final declaration.

"They get our oil and give us a worthless piece of paper," the hardline Iranian leader said after the close of the summit in the Saudi capital of Riyadh. He blamed US president George W. Bush`s policies for the decline of the dollar and its negative effect on other countries.

Oil is priced in US dollars on the world market, and the currency`s depreciation has contributed to rising crude prices and has eroded the value of their dollar reserves.

"All participating leaders showed an interest in changing their hard currency reserves to a credible hard currency," Ahmadinejad said. "Some said producing countries should designate a single hard currency aside from the US dollar ... to form the basis of our oil trade."

Venezuelan president Hugo Chavez also echoed the view, saying "the empire of the dollar has to end."

Iran and Venezuela have proposed trading oil in a basket of currencies to replace the historic link to the dollar, but they had not been able to generate support from enough fellow OPEC members — many of whom, including Saudi Arabia, are staunch US allies.
Although the final OPEC declaration did not specifically mention concern over the weak dollar, it appeared that Saudi Arabia had compromised a bit as the cartel has directed its finance ministers to study the issue.

OPEC will "study ways and means of enhancing financial cooperation among OPEC ... including proposals by some of the heads of state and governments in their statements to the summit," OPEC Secretary General Abdalla Salem el-Badri said.