US Treasury Secretary: "Gulf and Asian Allies Request Currency Swaps"

Bessent Acknowledges UAE's Request for Currency Swap

Scott Bessent, U.S. Secretary of the Treasury, who attended the APEC Session 1 last year. Photo by Yonhap News Agency

U.S. Secretary of the Treasury Scott Bessent stated on the 22nd (local time) that, in relation to the Iran war, countries in the Middle East and Asia have requested currency swap agreements with the United States.

Secretary Bessent appeared at a hearing of the U.S. Senate Appropriations Committee’s Subcommittee on Financial Services on this day and said, in connection with the International Monetary Fund (IMF) and World Bank Annual Meetings held in Washington, D.C. last week, “Many of our Gulf allies have requested currency swaps.” He added, “Numerous other countries, including several Asian allies, have also made such requests.”

A currency swap is an agreement that allows one country to deposit its own currency with a partner country and receive the partner’s currency or U.S. dollars in exchange during emergencies. Such requests are typically made during crises when there is a shortage of dollars or when exchange rates rise sharply.

Previously, U.S. media reported that Khaled Mohamed Balama, Governor of the Central Bank of the United Arab Emirates (UAE), attended the IMF and World Bank Annual Meetings and proposed a currency swap agreement to Secretary Bessent and others. In response, U.S. President Donald Trump stated in a phone interview with CNBC, “If I can help, I will help.”

Regarding his statement that he would consider a currency swap with the UAE, Secretary Bessent commented, “It would benefit both the UAE and the United States.”

The UAE serves as a financial hub for the Middle East, and therefore must meet the dollar demand not only for its own country but also for the entire region. The Iran war has resulted in the destruction of oil infrastructure across the Middle East, and the blockade of crude oil exports has caused economic damage, which appears to be the reason behind the request for a currency swap.

Secretary Bessent further explained, “Whether it is the Federal Reserve or the Treasury, currency swaps are intended to maintain order in the dollar funding market and to prevent disorderly sales of U.S. assets,” emphasizing that currency swaps can help stabilize financial market turmoil caused by the Iran war.

This content was produced with the assistance of AI translation services.