The United Arab Emirates has reportedly initiated talks with the United States regarding a potential financial safety net, as concerns grow over the economic repercussions of the ongoing Iran war.
According to a report by The Wall Street Journal, the discussions center on a possible backstop if the conflict deepens and puts further strain on the country's economy.
At the heart of these discussions is a proposal raised by UAE Central Bank Governor Khaled Mohamed Balama during meetings in Washington last week, which involves a currency swap line with officials from the Federal Reserve and the US treasury.
Emirati officials told the WSJ that while the country has so far avoided the worst economic consequences of the conflict, the risk of escalation remains a concern, and a financial lifeline could help cushion any sudden shocks if conditions worsen.
The discussions reflect growing unease within the UAE that the war could undermine its position as a global financial hub, with fears that prolonged instability may drain foreign currency reserves and trigger capital flight.
The conflict that began on February 28 has already started to leave its mark, with damage to energy infrastructure and disruptions to oil shipments through the Strait of Hormuz cutting off a key source of dollar inflows for the country.
