Gate News message, April 23 — US President Donald Trump said on April 22 that the United States is considering providing a currency swap arrangement to the UAE as part of support for its Gulf ally. The UAE central bank informally requested the swap, which would allow it to exchange dirhams for dollars should the Iran war cause prolonged economic challenges.
Trump called the UAE “a good country, a good ally of ours” and noted that a year ago he secured a $1 trillion investment commitment from the UAE in the United States. “They are very good for this country, so if I can help them I would,” he said in a CNBC television interview.
UAE Ambassador to the US Yousef Al Otaiba responded on social media, stating, “Any suggestion that the UAE requires external financial backing misreads the facts. The UAE and the United States will continue to prosper together for decades to come, not because one depends on the other for support, but because both benefit from one of the world’s most important economic partnerships.”
A currency swap line is an agreement between two central banks to exchange currencies. The arrangement would enable the UAE central bank to exchange dirhams for dollars with the Federal Reserve and supply them to the domestic financial system to mitigate potential dollar shortages. The two parties would swap back the funds at a pre-agreed date, with the UAE also paying interest. The Federal Reserve maintains permanent swap lines with the central banks of the eurozone, the UK, Japan, Canada, and Switzerland.
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