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Saudi Arabia, Kuwait and Russia today denied talks are taking place to ditch the US dollar to buy and sell oil.
A report said major producers in the Gulf were in secret negotiations with consumers such as Russia and China about ending dollar dealings and moving to a basket of currencies.
The report, in The Independent, said meetings have been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean oil is no longer priced in dollars.
The new basket of currencies proposed for oil trading includes the Japanese yen and Chinese yuan, the euro, gold and a new Arab currency — but not the dollar or the pound.
The deadline for the transition is 2018.
“These plans will change the face of international financial transactions,” a Chinese banker said.
“America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate.”
Saudi Central Bank Governor Muhammad al-Jasser led the way, saying the kingdom has not held talks about such a move.
Kuwait's oil minister Sheikh Ahmad al-Abdullah al-Sabah and Russian deputy finance minister Dmitry Pankin also dismissed the report.
The dollar fell against a host of currencies — but not the even-weaker pound — as traders reacted to the speculation.
It helped push gold to a record $1036.40 an ounce today while oil moved back above $71 a barrel.
“Gold has garnered strength several times this year, every time the dollar's role as the world's reserve currency comes under question,” said James Steel at HSBC.
“If the dollar remains on the defensive, gold could maintain prices even at these high levels.”
