Gulf in talks on replacing US$ for oil: report
Mon Oct 5, 2009
SYDNEY - Britain's The Independent newspaper on Tuesday reported that Gulf Arab states were in secret talks with Russia, China, Japan and France to replace the U.S. dollar with a basket of currencies in the trading of oil.
The U.S. 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 to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, 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," said the report. It added that France had also been involved in the talks.
The Independent said U.S. 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 U.S. 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."
However, Iran began settling most of its crude oil exports in non-dollar currencies several years ago, primarily the euro, but the actual price for its oil is still set in dollar terms.
http://www.reuters.com/article/businessNews/idUSTRE59507620091006?sp=true
Dollar falls vs euro, yen after media report on dollar
Mon Oct 5, 2009 9:27pm EDT
TOKYO (Reuters) - The dollar fell against the euro and the yen on Tuesday after Britain's Independent newspaper reported that Arab states were in talks to end the use of the dollar for oil trading.
The euro rose to $1.4682 from about $1.4664 and the dollar fell to about 89.14 yen from about 89.40 after news of the report.
AND FROM MARCH ...
Arab states should adopt a currency basket'
Wednesday, March 18, 2009
The Gulf and Arab countries should drop the dollar peg of their currencies and adopt a currency basket, since the dollar has damaged both global and American economies, said delegates at the fourth Dubai Police Academy International Conference.
The event, which discussed the legal, economic and security aspects of the global financial crisis, called on decisionmakers in Gulf countries to convince the US to accept a new financial and monetary world order that is governed by a basket of currencies, where the dollar's share does not exceed 25 per cent.
It proposed a new gold standard against a basket of currencies to replace the free dollar standard. And, as a first step, it said oil producers should revoke their 1970s commitment to price oil in dollars, devising a new mechanism instead in which the dollar has no big effect.
This would ensure that the financial and monetary policies of oil producers are free from the control of the dollar, said delegates at the conference. Oil producers should gradually work to end the link between the Arab and Gulf currencies and the weak US economy.
The conference also called for a serious agricultural strategy that would meet local market needs for basic commodities, especially of staples such as wheat and rice. Also, customs restrictions should be imposed on the export of these basic commodities.
Participants also called for a total halt to the privatisation or listing of public sector companies after two decades of feverish sales of such units, stressing that the crisis has highlighted the need for public ownership to strike a balance between market considerations and those of social justice.
The delegates stressed the need for steering the Gulf's sovereign wealth funds and capital towards investment in the regional environment.
In a lecture at the conference, Economic Adviser to the Saudi Industrial Development Fund Dr Ridha Abdul Salam spoke of a move to build a new economic order through a capitalist system where the state retains a basic role.
Abdul Salam said in the wake of the crisis the world is looking forward to a compromise that ensures protection of private investment and market freedom while achieving social justice at the same time. This would be possible through ensuring the state played some role in everyday economic life. He said six months into the crisis, international financial organisations, such as the IMF and the World Bank, are yet to play a role to match the size of the disaster that has hit the world.
http://www.business24-7.ae/articles/2009/3/pages/03182009_7b1aebe9df0244aeaaf64d09a165dbea.aspx
