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Pakistan's Premier Multilingual News Agency

Saudi Arabia now getting away from US dollar

The Finance Minister of Saudi Arabia in the WEF 2023 announced that the Kingdom is now considering to trade in other currencies apart from US dollar

Riyadh, 20 January 2023 (GNP): Muhammad Al – Jadaan, Finance Minister of Saudi Arabia, said that the Kingdom of Saudi Arabia would like to trade in other currencies apart from the US dollar with a view to improving its trade and relation with other counties.

He said the Kingdom has no issue in settling the required arrangements for this trade with other countries.

This statement of the Saudi Finance Minister is considered a gigantic shift in the policy of the Kingdom, a close ally of Washington that has pegged its currency to the dollar for decades.  Last year, Riyadh announced that it would make its oil trade with Beijing in Yuan instead of US dollars.

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This announcement came after President Xi Jinping’s visit to Gulf last December. Other countries of the region, for example, Egypt last year announced that it is going to issue bonds denominated in Yuan. In contrast, Israel is also diversifying its foreign exchange reserves by adding Yuan, the Australian dollar, and the Canadian dollar along with other country currencies.

Iran and Russia, the two close allies and most sanctioned countries of the world right now, also carry out their bilateral trade in Riyal and Ruble in order to lessen their dependency on the US dollar.

A Russian language business newspaper, Vedomosti, also reported that both Tehran and Moscow are mulling over a digital coin of theirs backed by gold.

Oil pricing and sales all over the world are benchmarked in US dollars. If Saudi Arabia goes for Petro-yuan replacing it with the decade-long Petro-dollar, it would definitely give a stunning blow to the power of the US dollar as a reserve currency of the world.

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The Saudi Finance Minister also said that the Kingdom would continue to support other brotherly Muslim countries like Turkey, Pakistan, and Egypt.

When the world economy is facing a crushing recession after the COVID pandemic and the Russia-Ukraine war, the Gulf countries are enjoying the windfall of fossil fuel price hikes.  As much of the Gulf region’s oil and gas was booked at very high prices by the European Union countries after the Russian attack on Ukraine.

It was this price bonanza that Saudi Arabia, after a decade, was able to announce its first surplus annual budget last December.  The $27 billion surplus budget constitutes 2.6 percent of Saudi GDP.

 

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