In the last few weeks, the US dollar has strengthened due to which many currencies of the world including the rupee are under pressure. But for a few days, other currencies are also seeing a rise against the world’s reserve currency. Euro, British pound, Canadian dollar, Australian dollar and most importantly the Chinese yuan have returned to their old position.
Chinese President Xi Jinping traveled to the Gulf to attend the China-Arab States Summit and the China-GCC (Gulf Cooperation Council) summit, ending in Saudi Arabia.
Saudi and GCC signed to pay in Yuan
The visit brought China closer to the Gulf countries, which have traditionally been US allies. The visit assumes significance in view of the current US-China standoff over trade and Taiwan. Xi met around 20 regional leaders during his four-day visit that ended on 10 December. Statements issued by China and the Gulf countries following Xi Jinping’s visit mostly talked about strengthening ties between China and the Gulf countries. But one point was very important in this. The news came that on the initiative of Beijing, both the countries have agreed to pay in Chinese Yuan for the oil bought from Saudi. It is said that similar agreements were also signed with GCC.
USD Sinking for while
The bypassing of the US dollar in trade by the sheikhs of the Gulf and China will be a matter of concern for the US. Sino-Saudi trade alone has reached $97 billion. The interesting thing is that during the visit, the dollar started breaking when the reports came there because the world started seeing it as an alternative to the dollar as an international currency. This news became important immediately after the news of the plan of trade between Russia and India in Rupee-Ruble instead of Dollar. Russia has put a condition of payment in ruble for selling fuel to its customers. This strengthened the ruble to $60 from $120 at the beginning of the Ukraine war.