Britain’s Independent newspaper yesterday reported that Gulf Arab states were in secret talks with Russia, China, Japan and France to replace the US dollar with a basket of currencies in the trading of oil.
The US dollar eased after the report, written by Middle East correspondent Robert Fisk and monitored on the Independent ’s Web site.
It cited unidentified sources in Gulf Arab states and Chinese banking sources in Hong Kong.
Fisk said the proposal was for trade in crude oil to move over nine years to a basket of currencies including the yen and yuan, the euro, gold and a new, unified currency planned for nations that make up the Gulf Cooperation Council, including Saudi Arabia, the United Arab Emirates, Kuwait and Qatar.
“Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars,” the report said.
It added that France had also been involved in the talks.
Most Gulf Arab states peg their currencies to the dollar.
The Independent said US authorities were aware that the meetings had taken place but had not discovered the details and were “sure to fight this international cabal.”
The issue of shifting oil trade away from the US dollar has been raised occasionally in recent years, but analysts and experts say it is unlikely to occur any time soon.
“I don’t think we will see much concrete actions coming out of such discussions because even when the dollar is weak, it doesn’t mean that commodities are undervalued,” said David Moore, commodities analyst at the Commonwealth Bank of Australia.
“In fact, when the dollar weakens, commodities prices tend to increase by a higher ratio,” Moore said.
Iran began settling most of its crude oil exports in non-dollar currencies, primarily the euro, several years ago, but the actual price for its oil is still set in dollar terms.
The US dollar dipped in the wake of the report, with analysts cautious about reading too much into it, particularly given the nine-year timeframe.
The euro edged up to US$1.4691 from US$1.4662 before the news broke, while the dollar eased to ¥89 from ¥89.40.
“This looks to be a very long-term thing with a few hurdles to cross,” said Jonathan Cavenagh, currency analyst at Westpac in Sydney. “Foremost, China needs to be more flexible with its currency.”
“Still, this is US dollar negative news which is moving markets and shows that central banks, not just in Asia, are looking to diversify away from the US dollar,” Cavenagh said.
The CIA has a message for Chinese government officials worried about their place in Chinese President Xi Jinping’s (習近平) government: Come work with us. The agency released two Mandarin-language videos on social media on Thursday inviting disgruntled officials to contact the CIA. The recruitment videos posted on YouTube and X racked up more than 5 million views combined in their first day. The outreach comes as CIA Director John Ratcliffe has vowed to boost the agency’s use of intelligence from human sources and its focus on China, which has recently targeted US officials with its own espionage operations. The videos are “aimed at
STEADFAST FRIEND: The bills encourage increased Taiwan-US engagement and address China’s distortion of UN Resolution 2758 to isolate Taiwan internationally The Presidential Office yesterday thanked the US House of Representatives for unanimously passing two Taiwan-related bills highlighting its solid support for Taiwan’s democracy and global participation, and for deepening bilateral relations. One of the bills, the Taiwan Assurance Implementation Act, requires the US Department of State to periodically review its guidelines for engagement with Taiwan, and report to the US Congress on the guidelines and plans to lift self-imposed limitations on US-Taiwan engagement. The other bill is the Taiwan International Solidarity Act, which clarifies that UN Resolution 2758 does not address the issue of the representation of Taiwan or its people in
US Indo-Pacific Commander Admiral Samuel Paparo on Friday expressed concern over the rate at which China is diversifying its military exercises, the Financial Times (FT) reported on Saturday. “The rates of change on the depth and breadth of their exercises is the one non-linear effect that I’ve seen in the last year that wakes me up at night or keeps me up at night,” Paparo was quoted by FT as saying while attending the annual Sedona Forum at the McCain Institute in Arizona. Paparo also expressed concern over the speed with which China was expanding its military. While the US
SHIFT: Taiwan’s better-than-expected first-quarter GDP and signs of weakness in the US have driven global capital back to emerging markets, the central bank head said The central bank yesterday blamed market speculation for the steep rise in the local currency, and urged exporters and financial institutions to stay calm and stop panic sell-offs to avoid hurting their own profitability. The nation’s top monetary policymaker said that it would step in, if necessary, to maintain order and stability in the foreign exchange market. The remarks came as the NT dollar yesterday closed up NT$0.919 to NT$30.145 against the US dollar in Taipei trading, after rising as high as NT$29.59 in intraday trading. The local currency has surged 5.85 percent against the greenback over the past two sessions, central
RSS