Professor Ashok Soin of the Department of Peace and Conflict Research at Uppsala University says that Saudi Arabia’s accession to the BRICS economic bloc “would accelerate bilateral trade conducted using the yuan as a business currency.”
How Saudi Arabia’s accession to BRICS could boost the use of the Chinese Yuan
Ashok Soin, a professor of peace and conflict research at Uppsala University in Sweden, told Al-Monitor last week that Saudi Arabia’s accession to the BRICS economic bloc will accelerate the use of the Chinese yuan as a trade currency. Professor Soen is Head of the Department of Peace and Conflict Research at Uppsala University. It is also the UNESCO Chair for International Water Cooperation.
Commenting on Saudi Arabia’s accession to the Shanghai Cooperation Organization (SCO) and the BRICS countries, which includes Brazil, Russia, India, China and South Africa, he said:
There is no doubt that Saudi Arabia becoming a member of the Chinese-dominated Shanghai Cooperation Organization and BRICS will accelerate bilateral trade conducted using the yuan as a commercial currency.
In March, Saudi Arabia became a dialogue partner of the Shanghai Cooperation Organization. The Shanghai Cooperation Organization was established in 2001 as a political, economic and defense alliance; It is the largest regional organization in the world. Saudi Arabia is not yet a member of the BRICS grouping, but the country has expressed interest in joining. Last month, Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman Al Saud discussed possible cooperation between Saudi Arabia and the BRICS countries.
Meanwhile, Saudi Arabia is actively negotiating with Beijing to price some of its oil sales to China in yuan, according to reports. While discussions regarding oil contracts denominated in yuan have been going on and off for six years between the two countries, they have intensified this year. The Uppsala University professor noted that trading oil in yuan would be a “big step” for China and a “big setback for the dollar’s position.”
An increasing number of countries are turning away from using the US dollar to settle deals. The Chinese Yuan has recently replaced the US dollar as the The most traded currency in Russia In addition to the currency most used to settle cross-border payments in China.
The BRICS group is also working to create a new currency that will reduce its member states’ dependence on the US dollar. A former White House economist believes that the BRICS currency will erode the dominance of the US dollar. Another economist predicted that the yuan and the euro would disrupt the dominance of the US dollar and the three would form a tripolar reserve currency world.
Do you think that Saudi Arabia’s accession to BRICS will undermine the dominance of the US dollar? Let us know in the comments section below.
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