‘Good ally’ UAE is turning to Trump for a lifeline in war’s dollar crunch

April 23, 2026 — 10:01am

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The aftershocks of the war in the Middle East are spreading into the global financial system, with one of the world’s wealthiest countries seeking a financial lifeline.

Donald Trump and his Treasury Secretary Scott Bessent have confirmed that the United Arab Emirates and “numerous” other countries in the Middle East and Asia have asked the US for financial support in the form of currency swap lines, or the ability to swap their currencies, at minimal cost, for US dollars.

At face value, the UAE shouldn’t have any need of financial support from the US or anyone else.

As its ambassador to the US, Yousef Al Otaiba, said this week in a post on “X,” the UAE is “one of the world’s most financially resilient economies, underpinned by more than $US2 trillion ($2.8 trillion) in sovereign investment assets.”

Its central bank has more than $US300 billion of foreign currency reserves and its banking system holds about $US1.5 trillion of deposits, he said.

That would signal that the country’s problem, if it has a problem, isn’t one of solvency, but liquidity.

The UAE has pledged to invest $US1.4 trillion in the US over the next decade. It has also been a major financial benefactor of the Trump family.

While it does appear that the UAE’s testing of the waters with the US is precautionary rather than in response to an immediate threat, it would be surprising if the Gulf nation wasn’t experiencing, or at least anticipating, some liquidity stresses.

The UAE’s currency, the dirham, has been pegged to the US dollar since 1997 at a rate of 3.6725 to the dollar. To maintain that fixed rate, during a period when the war has caused the greenback to appreciate materially, the UAE........

© WA Today