American blunders threaten to stop the dollar price of oil

Written by Javed Iqbal

NEW YORK – Oil-importing countries suffered an unprecedented double whammy this year as oil prices rose while other currencies depreciated against the US dollar. Not only are Asian and other emerging market currencies buying less in US dollar terms, but oil is costing more in nominal dollar terms – nearly triple its local currency price two years ago.

The dual pressure will put a tailwind behind Asian efforts to ditch the dollar as a trading currency. Asian central banks already have more than US$400 billion in local currency swap lines and can trade among themselves in their own currencies.

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Javed Iqbal

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