The cartel, in a paper detailing the impacts of recession on the global oil market, said the nations were picked among several others as having showing serious effects of fall in currency value.
OPEC said depreciation in the cuurency value is common in the in oil exporting countries, adding that whether it is the Venezuelan bolívar, or the Russian rouble, low oil prices are wreaking havoc in oil exporting economies and on their national currencies.
OPEC said: ‘’ In most cases, the scenario is similar: over the past decade, oil exporting countries used excessive revenues from oil to expand public services, or simply pursue populist policy in order to buy political stability. Once oil prices started to fall, the budgets did not shrink accordingly, which created a wide gap between the oil revenues and swelling fiscal demands.’’
According to OPEC, governments were forced to devalue their national currencies in order to stem the rapid outflow of foreign reserves.
‘’An unwanted consequence is almost always the rise in inflation and household prices, along with a decline in living standards and stalled economic growth,’’ it added.
OPEC gave a bit by bit accounts of impacts of falling curency value on the five countries thus.
