The UAE is in talks with the Trump administration on possible financial assistance if the war with Iran drags on, the Wall Street Journal reported.
The report published on Sunday said UAE Central Bank Governor Khaled Mohamed Balama met with US Treasury Secretary Scott Bessent and Federal Reserve officials last week in Washington, DC and raised the idea of a currency-swap line.
Emirati officials want to obtain a “financial lifeline” from the US in case the Iran war plunges the oil-rich Gulf state into a deeper financial crisis, the report said.
A prolonged war “could inflict major damage on its economy and its position as a global financial hub, depleting its foreign reserves and scaring away investors who once saw it as a stable and secure place for their money,” it added.
Iranian strikes have damaged oil and gas infrastructure in the UAE. The blockade of the Strait of Hormuz by Iran since late February has further shut off the UAE’s oil shipments to buyers, depriving it of a key source of financial revenue.
While Emirati officials have not made a formal request for a swap line, if that access is granted, the UAE Central Bank would have inexpensive access to US dollars “to support its currency or shore up its foreign reserves in case of a liquidity crisis,” the report further said.
UAE officials are of the view that President Donald Trump’s decision to join Israel in the war on Iran has “entangled their country in a destructive conflict” and the proposed financial assistance plan would be a precautionary “backstop” if their economy plunges into a deeper financial crisis due to the war, the report said citing US sources.