DUBAI, United Arab Emirates, (AP) - The wilting U.S. dollar is pushing the United Arab Emirates, a close U.S. ally, to convert 8 percent of its foreign exchange reserves into the healthier euros, the central bank governor said on Thursday.

The Emirates' nearly $25 billion currency reserves are currently 98 percent dollars. That percentage will drop to 90 percent in six to nine months if the bank's directors approve the switch as is expected, Central Bank governor Sultan Bin Nasser al-Suwaidi said.


...A bigger worry for the U.S. Federal Reserve Bank is that the six energy-rich Gulf Arab countries may consider converting dollar holdings in their far larger government investment funds, which Williams said keep more than $1 trillion under management. Gulf governments typically do not release the compositions of those funds.

The six Gulf Cooperation Council countries — the Emirates, Saudi Arabia, Kuwait, Qatar, Bahrain and Oman — enjoy a collective current account surplus of around $220 billion this year, which must be invested in foreign assets.

Other countries, including Russia, Venezuela, Indonesia and Iran also have decided to cut their dollar reserves or, in Iran's case, start pricing oil in the European currency.