WHY?

BANZAI7 NEWS--Saudi Arabia hasn’t held talks with China and other countries on dropping the dollar as the currency for pricing oil, Saudi Central Bank Governor Muhammad al-Jasser said, denying a report in the U.K.’s Independent newspaper.

The Independent report is “absolutely incorrect” and there has been “absolutely nothing” of that nature discussed between Saudi Arabia, the world’s biggest oil exporter, and other countries, al-Jasser told reporters in Istanbul, where he’s attending an International Monetary Fund summit. The dollar pared losses after his remarks.

The London-based newspaper said today that Gulf oil producers and nations including China, Japan, Russia and Brazil had held secret talks on a nine-year plan to phase out the dollar in oil trade, and move toward pricing the fuel in a basket of currencies plus gold. It cited unidentified Gulf officials and unidentified Chinese bankers.

“I don’t give credence to this story,” said Simon Williams, a Dubai-based economist at HSBC Holdings Plc. “Short- term, it’s highly unlikely that oil will not continue to be priced in dollars.”

Why?