United Arab Emirates Seeks Financial Support from the US - WSJ
The United Arab Emirates is holding talks with the US about a possible financial safety line as a result of the war with Iran, the Wall Street Journal reports.
ANNONS
The country’s central bank governor has raised the idea of a currency swap line in meetings with US authorities, but no formal request has yet been submitted. The proposal is described as preventive, while the country warns that reduced access to dollars could force the use of other currencies in oil trade.
Such a currency swap would normally require approval from the Federal Reserve, which is considered unlikely since the arrangement is mainly used for close partner countries during financial stress. At the same time, the war has put pressure on the economy despite large foreign exchange reserves, after attacks from Iran and the risk of lower oil revenues.
Abu Dhabi has recently raised about $4 billion from investors and Gulf states have increased borrowing to strengthen liquidity. The US has signaled readiness to support the region, but recovery is expected to be protracted even if the conflict ends quickly.
