Letter from the US: Washington’s threat to oil exporters

With Trump poised to secure a majority on the Federal Reserve Board, slashed interest rates will weaken the dollar and cause economic pain for producers

The US administration is moving aggressively to terminate the independence of the Federal Reserve Board in pursuit of lower interest rates. The consequence will be a weaker dollar and, most likely, higher long-term interest charges. With oil being traded in dollars and the US being both the world’s largest oil producer and a major exporter of fossil fuels, Washington’s actions could have severe consequences for oil-exporting nations. A lower dollar would cut the value of payments for these countries’ oil and gas exports, which would inflict economic pain because they purchase the majority of their imported goods and services from nations other than the US. Their real export earnings would be