The United Arab Emirates has begun talks with the United States about possible financial support amid the risk of escalating war in the Middle East.
As The Wall Street Journal writes, this is a potential currency swap line—a mechanism that would allow dollars to be exchanged for national currency to stabilize the financial system.
According to sources, no official request has yet been made, but the Emirates have warned that in the event of a dollar shortage, they may switch to settlements in other currencies, in particular the Chinese yuan, which could impact the dollar’s position in global oil trade.
The cause for concern is the consequences of the regional conflict – damage to energy infrastructure, problems with oil exports through the Strait of Hormuz and an outflow of investors.
Abu Dhabi notes that although the worst-case scenario has been avoided, the country is preparing for a possible deterioration in the economic situation.
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