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UAE Discusses Potential US Financial Backstop Amid Iran Conflict
(MENAFN) The United Arab Emirates is reportedly holding discussions with the US administration over the possibility of securing financial support arrangements if the conflict with Iran continues for an extended period, according to reports.
A report published on Sunday stated that UAE Central Bank Governor Khaled Mohamed Balama recently met with US Treasury Secretary Scott Bessent and officials from the Federal Reserve in Washington, DC, where the idea of establishing a currency-swap line was raised.
Emirati officials are said to be exploring what was described as a “financial lifeline” from the United States in anticipation of potential economic strain if the war deepens and affects the oil-dependent Gulf economy.
According to reports, a prolonged conflict could significantly harm the UAE’s economy and its status as a global financial center, potentially draining foreign reserves and discouraging investors who previously viewed the country as a stable destination for capital.
The report also noted that Iranian airstrikes have already caused damage to oil and gas infrastructure within the UAE. In addition, disruptions linked to the Strait of Hormuz since late February have reportedly hindered oil shipments, cutting off a major source of revenue.
While no formal request has been made, the report indicated that if a swap line were approved, it would allow the UAE Central Bank access to US dollars on favorable terms to help stabilize its currency and support foreign reserves in the event of a liquidity crisis.
A report published on Sunday stated that UAE Central Bank Governor Khaled Mohamed Balama recently met with US Treasury Secretary Scott Bessent and officials from the Federal Reserve in Washington, DC, where the idea of establishing a currency-swap line was raised.
Emirati officials are said to be exploring what was described as a “financial lifeline” from the United States in anticipation of potential economic strain if the war deepens and affects the oil-dependent Gulf economy.
According to reports, a prolonged conflict could significantly harm the UAE’s economy and its status as a global financial center, potentially draining foreign reserves and discouraging investors who previously viewed the country as a stable destination for capital.
The report also noted that Iranian airstrikes have already caused damage to oil and gas infrastructure within the UAE. In addition, disruptions linked to the Strait of Hormuz since late February have reportedly hindered oil shipments, cutting off a major source of revenue.
While no formal request has been made, the report indicated that if a swap line were approved, it would allow the UAE Central Bank access to US dollars on favorable terms to help stabilize its currency and support foreign reserves in the event of a liquidity crisis.
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