Largest OPEC nation chooses Yuan over the dollar

The reign of the petro-dollar took another hit on April 17 as the OPEC oil nation with the largest population signed a new deal with China to increase their domestic and international transactions using the Yuan rather than the long-standing petro-dollar.

In a deal forged on Sunday between The Industrial and Commercial Bank of China Ltd and the Central Bank of Nigeria, the two nations came to terms for the free flow of Chinese currency within the Nigerian economy, and to have the African oil nation hold the RMB as part of their currency reserves.

Nigeria’s plan to increase the availability of renminbi (yuan) has already favored the Naira against the US dollar, a top official with the Association of Bureau De Change Operators of Nigeria said Sunday.

Aminu Gwadabe, President of the Association disclosed this to reporters in Abuja, saying since the announcement, the Naira had appreciated by 10 naira against the dollar.

The Industrial and Commercial Bank of China Ltd and the Central Bank of Nigeria signed a deal on yuan transactions, as a way to resuscitate the current currency slump in Nigeria.

The deal meant the yuan will flow freely around Nigerian banks and will even be included in the country’s foreign exchange reserves.

— China Daily

Nigeria is just the latest OPEC nation to officially move away from the dollar and begin transacting in currencies other than the global reserve.  Two months ago, Iran announced they were no longer selling their oil in dollars in the wake of the U.S. removing them from economic sanctions, and would be transacting oil sales using the Euro as their primary currency.

Photo by Andrea Danti/Hemera / Getty Images

With Russia and China taking a bigger lead in international trade, the days of the petro-dollar, and U.S. hegemony over the global financial systems are coming to a close.  And with China on the cusp of bringing online their new CIPS payment system, along with a new global gold pricing mechanism, the world's move away from the dollar could now be measured in just weeks or months rather than years.