Saudi Arabia and U.S. Mum as 50-Year Petro-Dollar Agreement Expires

Joe Biden and MBS Petro Dollar

On Sunday, with no official statement from either side, Saudi Arabia apparently allowed a deal with the U.S. to expire that could have dire financial ramifications.

The Kingdom reportedly did not renew its 50-year petro-dollar agreement with the United States when it expired on June 9, meaning Saudi Arabia can now sell its oil in other currencies, including the Chinese renminbi (RMB), Euros, Yen, and Yuan, instead of exclusively in U.S. dollars. According to reports, the use of digital currencies like Bitcoin is also being considered.

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Ukraine Crisis Will Accelerate China’s Push for the Yuan as an International Currency

Xi Jinping

For years, Beijing has pushed to have the Chinese yuan accepted as an international currency, while countries unfriendly to the U.S. such as Venezuela, Iran, Russia, and North Korea have been looking for a dollar alternative for international trade. Western economic sanctions against Russia are now accelerating talks between Moscow and Beijing about finding “workaround” solutions, as Federal Reserve Chairman Jay Powell is warning the invasion of Ukraine may step up Beijing’s efforts to cut its dependency on the dollar.

Over the past decade, it has irked Beijing that, in spite of being the number two economic power, China’s currency has never become truly international. Technically, the yuan’s admission to the International Monetary Fund’s (IMF) Special Drawing Rights currencies (SDR) in 2016 makes the yuan an international currency. In practice, however, the yuan has very limited internationalization. Only 10.9% of the SDR is comprised of yuan. The only country which recognizes the yuan as an official currency is China, whereas about 15 countries use the U.S. dollar as their only official currency or an additional official currency.

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China Scrambles To Blunt The Force Of Trump’s Tariffs With Over $100 Billion Injection

Xi Jinping

by Hannah Bogorowski   China’s central bank announced late Sunday that it is planning to unleash nearly 700 billion yuan ($107.5 billion) into the financial system by cutting the amount of cash some banks must hold as reserves by 50 basis points. The People’s Bank of China (PBOC) said on…

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