• Saudi Arabia’s Finance Minister, Mohammed Al-Jadaan, announced that the kingdom is open to trading in currencies other than the U.S. dollar.
• This move away from the U.S. dollar signals a changing economic landscape, following China’s President Xi Jinping’s urging for the Gulf monarchs to accept yuan for oil.
• These statements were made at the 2023 World Economic Forum in Davos and are seen as another step toward de-dollarization.
This week, Saudi Arabia’s Finance Minister, Mohammed Al-Jadaan, made a statement that has the potential to change the global economic landscape. During the 2023 World Economic Forum in Davos, Switzerland, Al-Jadaan announced that the kingdom is open to trading in currencies other than the U.S. dollar. This shift away from the dollar signals a changing economic landscape and is seen as another step toward de-dollarization.
The move is likely in response to China’s President Xi Jinping’s urging for the Gulf monarchs to accept yuan for oil. Last March, Riyadh officials said that the country would consider accepting the Chinese currency. The statements made by Al-Jadaan this week show that Saudi Arabia is taking action on this initiative.
Al-Jadaan said, “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.” He also made it clear that the country is looking to improve trade between China, the U.S., and other countries.
This shift away from the U.S. dollar is a major step, as the country has had a 48-year relationship solely with the U.S. currency. However, the shift could open doors for other currencies, including the euro and the Saudi riyal, to be used in trading.
It is important to note that this shift may not be solely driven by Saudi Arabia’s own interests. 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.
Mohammed Al-Jadaan’s statements this week are a significant step in global economics, and the world will be watching to see the ripple effects of this decision. It remains to be seen what kind of impacts this shift away from the U.S. dollar will have on the global economy, but it is clear that this move is signaling a changing landscape.