THE director of Saudi Arabia’s central bank on 6 October denied press reports suggesting that Gulf states had held secret talks to replace the dollar as the prime currency on world oil markets. “There is absolutely no truth to this report,” Mohammed al-Jasser, head of the Saudi central bank, told the satellite news network al-Arabiya.
The Independent  reported on 6 October that finance ministers and central bank directors from Gulf countries, China, Russia, Japan and France had held secret talks on a scheme to switch from the dollar to a basket of currencies. The newspaper cited unnamed Chinese and Gulf Arab bankers as saying the countries were considering using a mix of the Chinese yuan, Japanese yen, the euro, gold, and a planned common currency across nations that make up the Gulf Cooperation Council. The Independent’s report had suggested that the plans for non-dollar oil payments may be behind the sudden rise in the gold price and could spell what the paper called “an extraordinary transition from dollar markets within nine years”.
During the previous US administration under George W. Bush, Gulf states had repeatedly assured of the continued use of the dollar as the lead currency on oil markets. Iran has failed in trying to convince the Organization of Petroleum Exporting Countries to use the euro instead of the dollar.
Brazil and India have meanwhile expressed interest in moves to replace the dollar as the currency in oil deals, the report said. “These plans will change the face of international financial transactions,” an unnamed Chinese banker was quoted as saying in the report.