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

After a 48-year relationship solely with the U.S. dollar, Saudi Arabia’s Finance Minister, Mohammed Al-Jadaan, said the kingdom is open to trading in currencies other than the U.S. dollar. The statements follow China’s president, Xi Jinping, urging the Gulf monarchs to accept yuan for oil, and Riyadh officials saying last March the country would consider accepting the Chinese currency.

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

This week, the world’s elite met in the Swiss Alpine town of Davos for the 2023 World Economic Forum, and Saudi Arabia’s Finance Minister, Mohammed Al-Jadaan, spoke to Bloomberg TV on Tuesday. Al-Jadaan stunned reporters when he said Saudi Arabia is open to trading in other currencies. “There are no issues with discussing how we settle our trade arrangements, whether it’s in the U.S. dollar, the euro, or the Saudi riyal,” Al-Jadaan said. The finance minister added:

I don’t think we are waving away or ruling out any discussion that will help improve the trade around the world.

The Saudi Arabian finance minister’s statements have been interpreted as another step toward de-dollarization. To understand why Al-Jadaan’s comments are significant, one must go back in time. In 1971, the U.S. government and President Richard Nixon ended the gold standard, and over the next three years, oil prices skyrocketed. In 1973 and 1974, federal officials and U.S. Treasury Secretary William Simon visited with monarchs in Riyadh.

At that time, the petro-dollar was born as Simon convinced the Saudis to sell oil in U.S. dollars and instructed them to purchase Treasury bonds. In addition to the Saudis, all of the Organization of the Petroleum Exporting Countries (OPEC) followed suit and priced their oil in U.S. dollars. Many believe this has given the U.S. an unfair advantage and that it has been the root cause of many of the wars the U.S. has been involved in over the last few decades. In more recent times, the U.S. dollar’s hegemony has been seemingly threatened.

Growing Saudi Tensions With U.S.

For instance, Saudi Arabia has recently been considering joining the BRICS nations, which include Brazil, Russia, India, China, and South Africa. At the China-GCC…