Overview
- Testifying Wednesday, Treasury Secretary Scott Bessent said many Gulf partners and some Asian allies asked the U.S. for temporary dollar swap lines tied to strains from the Iran war.
- He said swap lines would keep dollar funding orderly and help prevent allies from dumping U.S. assets in a rush to raise cash.
- The White House says the UAE has not made a formal request, while the UAE’s ambassador said the country is financially resilient and does not need outside backing.
- With no deal announced, experts on Friday noted the Fed cannot be directed to approve a swap and said Treasury’s Exchange Stabilization Fund is small next to UAE reserves, pointing to the Fed’s FIMA Repo that lends dollars against U.S. Treasurys.
- Politics loom over the decision, as President Trump and some Republicans voice openness, Democrats question optics and Trump family ties, and analysts cite Treasury’s $20 billion Argentina swap last October as a precedent.