What Saudi's decision to end the 'Petrodollar' deal mean?
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Saudi Arabia officially ended its 50-year 'Petrodollar' agreement with the United States, shifting to a multicurrency system for oil sales. This transition allows the kingdom to sell oil in various currencies and is a welcome sign for those countries looking at options other than the dollar use. The shift away from the Petrodollar deal by Saudi Arabia would alter the global economic landscape and threaten the dollar's dominance in international trade. The move coincides with Saudi Arabia's recent participation as a guest nation at the BRICS outreach ministerial meeting in Russia, where BRICS emphasized the necessity for reforms in International Financial Institutions. The decision to end the Petrodollar deal is driven by the broader rhetoric of financial sanctions as a geopolitical tool by the US, which is causing countries to move away from the dollar for global trade settlements. Central bank reserve managers are increasingly worried about the safety of their foreign currency holdings, with the "weaponization" of foreign exchange reserves being deemed a high risk. If people flee dollar-denominated assets, the dominance of the US currency could be further challenged. Global central banks are diversifying away from the dollar by increasing their yen and euro allocations and increasing their gold reserves.
#SaudiArabia #Petrodollar #MulticurrencySystem #Brics #FinancialSanctions #GeopoliticalRisk #ForeignExchangeReserves #GlobalTrade #DollarDominance #InternationalTrade
https://www.wionews.com/business-economy/what-saudis-decision-to-end-the-petrodollar-deal-mean-740090
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