Gulf Insider
Several Gulf countries have discussed receiving dollar swap lines from the US, the WSJ reported last week. In the near term, there is an economic drag if volumes of oil and gas sales have fallen by more than the price effect can offset, or where tourist and business travel has dried up. The effect is similar to that of the pandemic: slowing growth and fiscal revenues, and accelerated demand for fiscal spending. As the WSJ reported, UAE. Central Bank Gov. Khaled Mohamed Balama had raised the idea of a currency-swap line with Treasury Secretary Scott Bessent and Treasury and Federal Reserve officials in meetings in Washington. The Emiratis emphasized that they had so far avoided the worst economic effects of the conflict but might still need a financial lifeline. The talks highlighted the U.A.E.’s concern that the war could inflict major damage on its economy and its position as a global financial hub, depleting its foreign reserves and scaring away investors who once saw it as a stable and secure place for their money. The conflict has damaged Emirati oil-and-gas infrastructure and shut off their ability to sell oil using tankers transiting the Strait of Hormuz, depriving it of a key […]
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