The United Arab Emirates (UAE) announced it is evaluating the possibility of conducting its financial transactions in Chinese yuan due to constraints in dollar supply. According to a report by Mehr News Agency, UAE Central Bank Governor Khaled Mohamed Balama requested the establishment of a currency swap line during meetings with US Treasury Department and Federal Reserve officials in Washington. This request emerged in connection with concerns over the growing economic impact on the Gulf region of US and Israeli attacks on Iran, and the risk to the UAE's position as a global financial hub.
US officials stated they view the UAE's request as a precautionary measure. The UAE indicated that while it has so far avoided the most severe economic consequences of the US-Israeli attacks, a worsening situation could create a need for financial support. The regional crisis has damaged the UAE's oil and gas infrastructure and negatively affected tanker traffic in the Strait of Hormuz. This situation has led to a disruption in dollar-denominated oil revenues.
The UAE's move is seen as a measure aimed at mitigating the economic repercussions of geopolitical tensions in the region. However, related developments need to be monitored closely.