London/Dubai - The dollar continued its slide Tuesday following a report that Gulf countries, China, Russia, Japan and France had held secret talks on replacing the dollar as the prime currency for world oil markets. Authorities from Gulf countries quickly denied a report run by London's Independent newspaper indicating that finance ministers and central bank officials were quietly discussing replacing the dollar with a basket of currencies.
"There is absolutely no truth to this report," Mohammed al-Jasser, head of the Saudi central bank, told the satellite news network al-Arabiya.
But that did not stop the dollar from continuing to fall against world currencies, falling 0.88 per cent against the yen, and falling to 1.4735 dollars per euro near the close of business in Europe.
Gold likewise continued to gain ground, rising by 2.32 per cent to 1.042 dollars per ounce on Tuesday.
Gulf Arab petroleum giants Saudi Arabia, Kuwait and the United Arab Emirates all denied the Independent's story citing 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 instead of the dollar for oil payments.
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 Independent called "an extraordinary transition from dollar markets within nine years."
While the US is aware of meetings taking place, it did not have details of what was being discussed, according to the Independent.
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.
Iran uses the euro for its oil sales and has unsuccessfully lobbied OPEC to switch from the dollar when calculating international oil prices.
Arab Gulf states, by contrast, have repeatedly assured the United States that they would continue using the dollar as the main currency on oil markets.
