Gulf Arab States and Russia deny plans to dump the U.S. dollar as the currency for oil trading. The Russian deputy finance minister, Dmtry Pankin, said there was no discussion of giving up the USD for a basket of currencies. Saudi's central bank chief said the reports are "absolutely incorrect."
Gulf Arab States
Converting oil purchases to non-dollar purchases is hot news. There are abundant statements from world leaders to make the effort believable:
Russia has in the past publicly raised the idea of shifting its oil trade away from the dollar because of the weakness and volatility of the currency, which has been undermined by the U.S. trade and budget deficits.
China, holder of the world's biggest foreign exchange reserves, has suggested that in the long term, the dollar should lose its role as the globe's top reserve currency.
The above report, however, offers a reason why dumping the dollar may not be feasible:
And apart from the strong political links between Gulf nations and the United States, the lack of convertibility for many Gulf currencies and the yuan tops the list of practical hurdles to making such a shift.
The United Nations wants the USD diminished. China wants it. Treasury Secretary Timothy Geither is open to the suggestion.
Denials from oil producers are flying today regarding dumping the dollar, but perhaps they "protesteth" too much. This is exactly the time to take these efforts seriously. Read Oil for Basket of Currency: Falling Dollar Road to One World Currency? - fresh from yesterday's news. The danger signs are clear.