U.A.E. Asks U.S. for a Wartime Financial Lifeline

The Wall Street Journal published a report detailing UAE discussions with the United States over a potential wartime financial lifeline, including the possibility of a currency-swap arrangement.

A cease-fire took effect in the conflict involving Iran and the UAE.

Saudi Arabia’s Finance Minister Mohammed Al-Jadaan said the logistics of scheduling tankers and bringing them back could take until the end of June.

Before the cease-fire took effect on April 17, Iran targeted the UAE, firing more than 2,800 drones and missiles, though most were shot down, according to the UAE Ministry of Defense.

Emirati officials said they had not made a formal request for a swap line, framing the talks as preliminary and precautionary.

U.A.E. Central Bank Governor Khaled Balama raised the idea of a currency-swap line with Treasury Secretary Scott Bessent and Treasury and Federal Reserve officials in meetings in Washington last week, describing the proposal as preliminary and precautionary, not yet a formal request.

The UAE dirham is pegged to the dollar and backed by about $270 billion in foreign-currency reserves, but the war has placed pressure on these holdings through capital flight and market volatility.

Finance ministers and central bankers in Washington for IMF and World Bank meetings said they did not expect an easy or swift recovery for the region.

Treasury officials invited Gulf countries on the sidelines of the IMF and World Bank meetings to outline their needs for repairing infrastructure and rebuilding economies, promising to place them at the front of the line if assistance is needed.

Bahrain set up a roughly $5 billion swap line with the UAE earlier in April 2026 to help improve financial stability, according to central banks.

Abu Dhabi raised around $4 billion from investors in private-placement transactions arranged by banks including Goldman Sachs earlier in April 2026 to bolster liquidity.

S&P Global said the UAE’s substantial fiscal, external, and policy flexibility would act as a buffer against the war’s economic effects, but warned that prolonged disruption to oil exports and infrastructure adds risk to expectations.

The Treasury approved a $20 billion swap for Argentina through the Exchange Stabilization Fund last year.

During periods of acute stress, the Fed extended swap lines to nine other central banks, including during the Covid-19 pandemic.

The Federal Reserve used swap lines heavily during the 2008 financial crisis to support funding markets and foreign central banks.