Yousef Al Otaiba, the UAE's ambassador to the US and Minister of State, has described the country as one of the world's most resilient economies, after US President Donald Trump said a currency swap was under consideration.
The Wall Street Journal on Sunday reported that the UAE's central bank governor raised the idea of a currency swap line with US Treasury Secretary Scott Bessent and Federal Reserve officials in meetings in Washington last week.
“It is,” Mr Trump told CNBC when asked if the administration was considering such a plan. “It’s been a good country. It’s been a good ally of ours. And, you know, these are unusual times.”
Mr Al Otaiba said in a statement that the UAE has no dollar liquidity problems and trillions of dollars worth of sovereign wealth fund assets. Any suggestion that the UAE requires external financial backing “misreads the facts”, he said.
“The UAE is one of the world’s most financially resilient economies, underpinned by more than $2 trillion in sovereign investment assets; more than $300 billion in foreign currency reserves held by the UAE's central bank; and a banking sector with approximately $1.5 trillion in deposits,” he said.
“That strength is precisely why the UAE has already invested more than $1 trillion in the US economy, with a clear pathway for that figure to significantly grow.”
He added that the UAE appreciates Mr Trump’s recognition of the country as “one of America’s most important economic and trade partners".
In the case of a US-UAE swap, the Federal Reserve would probably lend dollars to the UAE central bank, holding dirhams in return, with the transaction reversing in the future.
Similar moves have been floated before. Last autumn, the US signed an economic stabilisation agreement in a bid to boost the Argentine peso before a midterm election in the country, which was crucial for Argentine President Javier Milei, a Trump ally.
“This is a call for confidence, not a call for help,” said Ziad Daoud, chief emerging markets economist for Bloomberg Economics.
“The UAE wants to join the club of central banks – like the UK, Japan and Europe – that hold standing swap lines with the Fed. Status matters more than dollars.”
