Chavez proposes oil-backed currency

Venezuelan President Hugo Chavez sought Arab support yesterday for a proposed oil-backed currency to challenge the US dollar in his latest swipe at Washington's dominance in global financial affairs.

It's highly unlikely Chavez will gain any serious momentum for his "petro-currency" proposal at a summit of South American and Arab League leaders, but it represented another attempt to undercut the dollar's standing as the world's leading commercial currency.

China has struck deals - most recently this week with Argentina - to conduct trade in currencies other than the dollar. Iran has proposed replacing the dollar with the euro or other currencies to set worldwide oil prices.