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US Treasury Secretary Scott Bessent on Wednesday said several Gulf and Asian countries have requested currency swap lines to help deal with the effects from the Iran war.
Mr Bessent did not specify which countries have made the requests during his testimony before US senators on Capitol Hill, but said currency swap lines would help to stabilise financial markets.
“Swap lines, whether it's from the Federal Reserve or the Treasury, are to maintain order in the dollar funding markets and to prevent the sale of the US assets in a disorderly way,” Mr Bessent said.
The US last year provided Argentina with a $20 billion currency swap to stabilise the Argentinian peso, which helped strengthen the position of President Javier Milei's party before the country's midterm election.
Yousef Al Otaiba, the UAE's ambassador to the US and Minister of State, on Tuesday 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 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.
Mr Al Otaiba said the suggestion that the UAE requires external financial backing “misreads the facts”
The Wall Street Journal on Sunday reported that the UAE's central bank governor raised the idea of a currency swap line with Mr Bessent and Federal Reserve officials in meetings in Washington last week.
The Treasury Secretary said a currency swap line would be beneficial to both countries.
“So, the swap line would benefit both the UAE and the US, and as I said, numerous other countries, including some of our Asian allies, have also requested them,” he said.
