"If the Iran war triggers a deeper economic downturn, a swap line with the U.S. would provide the UAE's central bank with a cheap supply of dollars that could back the dirham, which is pegged to the greenback, or beef up foreign-exchange reserves in the event liquidity runs low."
"Any pivot away from the dollar by a top oil producer would represent a major threat to the currency's supremacy. Saudi Arabia's decision in 1974 to price its exports in dollars helped establish the dollar as the standard across the global oil trade."
"Damage to Gulf economies could encourage an unwind in their foreign asset savings. In this context, reports that the petrodollar regime is under threat are becoming more pronounced."
The UAE's central bank chief suggested a currency-swap line with U.S. officials amid concerns over the Iran war's impact on oil exports and dollar revenue. The UAE possesses significant foreign-exchange reserves but faces risks from Iran's actions affecting energy infrastructure. A swap line could provide liquidity support for the dirham, which is pegged to the dollar. Officials indicated a possible shift to the yuan or other currencies for oil transactions if dollar availability decreases, posing a threat to the dollar's dominance in global oil trade.
Read at Fortune
Unable to calculate read time
Collection
[
|
...
]