Saudi Arabia Open to Trading in Currencies Other Than US Dollar, Signaling a Shift Toward De-Dollarization

After a 48-year narration solely with the U.S. dollar, Saudi Arabia’s Finance Minister, Mohammed Al-Jadaan, said the kingdom is unfastened to trading successful currencies different than the U.S. dollar. The statements travel China’s president, Xi Jinping, urging the Gulf monarchs to judge yuan for oil, and Riyadh officials saying past March the state would see accepting the Chinese currency.

Saudi Arabia’s Move Away from US Dollar Signals Changing Economic Landscape

This week, the world’s elite met successful the Swiss Alpine municipality of Davos for the 2023 World Economic Forum, and Saudi Arabia’s Finance Minister, Mohammed Al-Jadaan, spoke to Bloomberg TV connected Tuesday. Al-Jadaan stunned reporters erstwhile helium said Saudi Arabia is unfastened to trading successful different currencies. “There are nary issues with discussing however we settee our commercialized arrangements, whether it’s successful the U.S. dollar, the euro, oregon the Saudi riyal,” Al-Jadaan said. The concern curate added:

I don’t deliberation we are waving distant oregon ruling retired immoderate treatment that volition assistance amended the commercialized astir the world.

The Saudi Arabian concern minister’s statements person been interpreted arsenic different measurement toward de-dollarization. To recognize wherefore Al-Jadaan’s comments are significant, 1 indispensable go backmost successful time. In 1971, the U.S. authorities and President Richard Nixon ended the golden standard, and implicit the adjacent 3 years, oil prices skyrocketed. In 1973 and 1974, national officials and U.S. Treasury Secretary William Simon visited with monarchs successful Riyadh.

“Our purpose is truly to span the divide, our purpose is to beryllium a unit of connection and we are encouraging communication, whether it is China, the U.S. oregon others,” Mohammed Al-Jadaan remarked astatine the World Economic Forum successful Davos.

At that time, the petro-dollar was calved arsenic Simon convinced the Saudis to merchantability lipid successful U.S. dollars and instructed them to acquisition Treasury bonds. In summation to the Saudis, each of the Organization of the Petroleum Exporting Countries (OPEC) followed suit and priced their lipid successful U.S. dollars. Many judge this has fixed the U.S. an unfair vantage and that it has been the basal origin of galore of the wars the U.S. has been progressive successful implicit the past fewer decades. In much caller times, the U.S. dollar’s hegemony has been seemingly threatened.

Growing Saudi Tensions With U.S.

For instance, Saudi Arabia has precocious been considering joining the BRICS nations, which see Brazil, Russia, India, China, and South Africa. At the China-GCC summit, China’s President Xi Jinping urged Saudi Arabia to commencement accepting yuan for barrels of oil. Moreover, past March, Saudi Arabia said it was reasoning astir accepting the Chinese currency for oil. The Wall Street Journal noted that the Saudis were not pleased with U.S. President Biden’s dealings with Iran implicit the country’s atomic program.

In October 2022, reports further claimed that members of the Saudi government, including Crown Prince Mohammed bin Salman, privately mocked Biden’s intelligence acuity. Al-Jadaan elaborate connected Tuesday that the leaders successful Saudi Arabia person a bully enslaved with China and different nations.

“We bask a precise strategical narration with China and we bask that aforesaid strategical narration with different nations, including the U.S. and we privation to make that with Europe and different countries who are consenting and capable to enactment with us,” Al-Jadaan remarked. So far, Saudi Arabia’s statements person been considered rhetoric, and nary of the aforementioned considerations (accepting yuan for oil, joining BRICS) has travel to fruition.

What bash you deliberation the imaginable determination distant from the U.S. dollar by Saudi Arabia means for the aboriginal of planetary commercialized and finance? Let america cognize your thoughts astir this taxable successful the comments conception below.

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