Could a War Next Door Shake an Oil Power Too? U.S. Says It Is Reviewing a Currency Swap with the UAE, Which Denies It

\r\n[The Financial News] U.S. President Donald John Trump said the United Arab Emirates (UAE) has suffered significant damage from the Iran war, and that Washington is considering financial support, including a currency swap.
In a phone interview with CNBC on the 21st local time, Trump answered "Yes" when asked whether he was considering a currency swap deal with the UAE. He added, "We will help if we can," and said, "They are a strong ally of ours, and as you know, these are unusual times." He also said it was surprising to make such a consideration because the UAE is a very wealthy country, while explaining that the UAE had suffered the biggest war-related damage among Gulf states.
Earlier, The Wall Street Journal (WSJ) reported that Khaled Mohamed Balama, governor of the Central Bank of the UAE (CBUAE), attended the annual meetings of the International Monetary Fund (IMF) and the World Bank and proposed a currency swap to U.S. Secretary of the Treasury Scott Bessent and others. The Journal also reported that the UAE pressed the issue by saying that the U.S. attack on Iran had involuntarily drawn the country into the conflict, and that if it ran short of dollars, it would have no choice but to consider using other currencies, such as the yuan, for oil transactions.
The New York Times (NYT) also noted that the Iran war has damaged oil and gas infrastructure across the Middle East, and that the closure of oil export routes through the Strait of Hormuz has dealt a major blow to the economies of affected countries. It added that the fact that the UAE had asked about financial support alone shows how far-reaching the war’s ripple effects have been.
However, the Ambassador of the United Arab Emirates to the United States said he was grateful that Trump recognized the UAE as one of the United States’ most important economic and trade partners, but drew a line by saying that claims the UAE needs external financial support are "misinformed." The UAE currency is pegged to the dollar, and the Central Bank of the UAE is said to still hold sufficient foreign reserves despite disruptions to oil exports caused by the war.
whywani@fnnews.com Hong Chaewan Reporter