UAE officials reportedly warned they may be forced to use yuan or other currencies if they run low on dollars amid the Iran war |
UAE officials reportedly warned they may be forced to use yuan or other currencies if they run low on dollars amid the Iran war
The United Arab Emirates apparently dropped a hint the dollar’s dominance isn’t assured in the global oil trade if fallout from the Iran war gets worse.
According to The Wall Street Journal, the UAE’s central bank chief raised the idea of a currency-swap line with Treasury Department and Federal Reserve officials during meetings in Washington, D.C., last week.
To be sure, the UAE has plenty of money, including $270 billion in foreign-exchange reserves and trillions of dollars across its sovereign wealth funds.
But while the UAE isn’t in a crisis, Iran has damaged its energy infrastructure and has blocked oil exports by closing off the Strait of Hormuz, weighing on dollar-denominated revenue.
If the Iran war triggers a deeper economic downturn, a swap line with the U.S. would provide the UAE’s central bank with a cheap supply of dollars that could back the dirham, which is pegged to the greenback, or beef up foreign-exchange reserves in the event liquidity runs low, the report said.
UAE officials also pointed out the U.S. started the Iran war........