Saudi open to diversify away from greenback

China has called for Saudi Arabia to price oil sales in yuan
Saudi open to diversify away from greenback
Saudi Finance Minister Mohammed al-Jadaan (Photo Credit: Davos 2023)

Saudi Arabia will consider trading in currencies other than the US dollar, according to the country’s finance minister, in one of the clearest indications yet that the oil-rich Kingdom is willing to diversify away from the greenback.

“There are no issues with discussing how we settle our trade arrangements, whether it is in the US dollar, the euro, or the Saudi riyal,” the Kingdom’s finance minister, Mohammed al-Jadaan, said on the sidelines of Davos, Switzerland.

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Jadaan’s remarks will almost certainly fuel speculation about Riyadh’s willingness to conduct oil sales in the Chinese Yuan.

During a visit to the Gulf in December, Chinese President Xi Jinping told Arab leaders that Beijing would push for the purchase of oil and gas in yuan as part of its strategy to position its currency for use in international trade.

Saudi Arabia, like the other Gulf states, has long tied its currency to the US dollar.

Oil is sold in US dollars all over the world. More than a quarter of Saudi Arabia’s crude exports are to China. If the Kingdom adopts a “petroyuan,” the dollar’s status as the world’s reserve currency may suffer.

Separately, Jadaan stated that Saudi would continue to assist countries such as Turkey, Pakistan, and Egypt.

Meanwhile, Saudi Arabia has said it may increase investments in cash-strapped Pakistan by $10 billion. Late last year, the Kingdom extended the terms of its $3 billion deposit in Pakistan’s central bank, in a bid to boost its foreign-currency reserves.

Jadaan also mentioned the need to regulate new financial technology during a panel Tuesday.

The World Economic Forum (Davos) started on Monday and will conclude on Friday.

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