UAE rejects liquidity concerns while exploring U.S. currency swap

The UAE has moved to reassure markets that it has no liquidity problems or need for external financing, despite seeking assistance in the form of a currency swap with the U.S. amid the economic fallout from the Iran war.

U.S. President Donald Trump confirmed that a currency swap, in which the Federal Reserve would likely lend dollars to the UAE Central bank in return for dirhams, was under consideration. 

“It’s been a good country. It’s been a good ally of ours. And, you know, these are unusual times,”he told CNBC on Tuesday when asked if the administration was weighing the plan, first reported by The Wall Street Journal on Sunday.

“I’m surprised, because they are really rich,” Trump said. “They’re very good for this country, so yeah, if I could help them, I would.”

Yousef Al Otaiba, the UAE’s Ambassador to the U.S. and a Minister of State, quickly clarified the UAE’s position, saying that “any suggestion that the UAE requires external financial backing misreads the facts.”

“The UAE is one of the world’s most financially resilient economies, underpinned by more than $2 trillion in sovereign investment assets,” he said, adding “we very much appreciate President Trump’s recognition of the UAE as one of America’s most important economic & trade partners.”