Saudi Arabia is Receptive Towards Ditching the US Dollar for International Commerce
Jose Nino
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On January 17, 2023, Saudi Finance Minister Mohammed al-Jadaan announced during a televised interview that Saudi Arabia is “open to discussions” about carrying out trade in currencies besides the United States dollar.
“There are no issues with discussing how we settle our trade arrangements, whether it is in the US dollar, whether it is the euro, whether it is the Saudi riyal,” Al-Jadaan said to Bloomberg TV at this year’s World Economic Forum (WEF) held in Davos, Switzerland.
“I don’t think we are waving away or ruling out any discussion that will help improve the trade around the world,” the Saudi official continued.
The finance minister also called attention to how Saudi Arabia is working with multilateral institutions to help out countries such as Egypt, Pakistan, and Turkey in times of economic turmoil.
“We are investing heavily in these countries and will continue to look for opportunities to invest,” Al Jadaan stated. “It’s very important to bring stability.”
He noted that Saudi Arabia is aiming to invest $10 billion in Pakistan, which The Cradle noted came a few months after “extending the term of a $3 billion deposit to boost Islamabad’s foreign-currency reserves.”
In the last year, Saudi Arabia has been looking to wean itself off the dollar as its main currency for trade. This move comes during a time when relations between the US and Saudi Arabia have been rapidly deteriorating.
Since US President Joe Biden was installed in office, Saudi Arabia has been compelled to recalibrate its relations with the US. The Saudis have also strengthened economic ties with Russia and China while also making a progress towards a potential rapprochement with Iran.
The situation deteriorated back in October when OPEC+ roll out a notable oil production cut that took US officials by surprise.
The Cradle noted that countries such as Egypt, India, Iran, and Russia have also put forward plans to phase out the US dollar in bilateral trade.
In addition, The Cradle report highlighted the US government’s precarious fiscal state:
In recent months, economists have warned that the US dollar is headed for a major crash as the US national debt stands now above $31 trillion. Moreover, in the fiscal year 2022, the White House ran a $1.38 trillion budget deficit, sending the debt-to-GDP ratio ballooning past 125 percent.
As the US strains itself both domestically and internationally, the dollar’s standing on the world stage will diminish. US policymakers would be wise to recognize that the imperial enterprise that is the US is unsustainable and must be rolled back if the country is to survive as a coherent polity.
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