{"text":[[{"start":10.9,"text":"The US is considering providing currency swap lines to the United Arab Emirates and other allies in the Gulf and Asia whose economies have been hit by the fallout of Donald Trump’s war with Iran."}],[{"start":22.85,"text":"US Treasury secretary Scott Bessent said the UAE and “numerous” other countries had requested support from Washington as the conflict sends shockwaves through economies in the Middle East and beyond. "}],[{"start":35.650000000000006,"text":"“Swap lines, whether it’s from the Federal Reserve or the Treasury, are to maintain order in the dollar-funding markets and to prevent the sale of the US assets in a disorderly way,” Bessent said on Wednesday of the financial tools, which are used to ensure access to dollars and help maintain financial stability."}],[{"start":53.00000000000001,"text":"The Iran war sparked a multiweek surge in the value of the US currency, forcing some countries with dollar pegs to intervene in foreign exchange markets."}],[{"start":62.45,"text":"Foreign central banks in economies with dollar pegs often intervene by selling their holdings of US Treasuries."}],[{"start":68.9,"text":"Bessent’s comments, made during a hearing before the Senate appropriations committee, come a day after Trump confirmed reports that a swap line with the UAE was under consideration. Bessent said on Wednesday that any such arrangement “would both benefit the UAE and the US”. He did not specify which other countries had made requests."}],[{"start":90.35000000000001,"text":"The UAE was frustrated when it was leaked that it had discussed a swap with the Treasury and at inferences this hinted at a liquidity squeeze in the Gulf state. "}],[{"start":99.95,"text":"Yousef al-Otaiba, the UAE’s ambassador to Washington, said “any suggestion that the UAE requires external financial backing misreads the facts”."}],[{"start":110.2,"text":"“The UAE is one of the world’s most financially resilient economies, underpinned by more than $2tn in sovereign investment assets,” he said in a post on X. “More than $300bn in foreign currency reserves held by the UAE’s central bank; and a banking sector with approximately $1.5tn in deposits.”"}],[{"start":131.75,"text":"A person familiar with the UAE’s thinking described the swap line as a “contingency measure”."}],[{"start":137.25,"text":"“It’s about building confidence and signalling we are one of the most trusted economies in the world, like Japan and Europe, and the US is putting the UAE in that category,” the person said. "}],[{"start":148.8,"text":"A person familiar with Riyadh’s thinking said, “Saudi Arabia did not request a swap line, given the comfortable external buffers.”"}],[{"start":156.75,"text":"The Trump administration has proved willing to use currency swaps to prop up allied economies. In October, the Treasury approved a $20bn swap line for Argentina’s cash-strapped central bank through its Exchange Stabilization Fund."}],[{"start":170.55,"text":"The Gulf states, which maintain currency pegs with the dollar, have borne the brunt of Iran’s retaliatory strikes after the US and Israel launched their war on the Islamic republic. Iranian missiles and drones have hit energy infrastructure across the Gulf and severely disrupted air travel and tourism to the region."}],[{"start":188.8,"text":"Crucially, Iran has also slowed traffic through the Strait of Hormuz to a trickle, strangling the ability of the Gulf states to export oil, gas, petrochemicals and feedstock for fertilisers."}],[{"start":200.60000000000002,"text":"The wealthiest Gulf states — Qatar, the UAE, Kuwait and Saudi Arabia — all have large reserves and manage some of the world’s largest sovereign wealth funds. The Gulf states combined manage more than $5tn in sovereign wealth funds."}],[{"start":216.55,"text":"But the longer the strait is closed, the more pressure their finances will come under as they lose export revenues."}],[{"start":223.35000000000002,"text":"The IMF forecasts that the economies of Bahrain, Kuwait and Qatar will contract this year — the latter by up to 8.6 per cent — while growth in Saudi Arabia and the UAE will slow but remain at about 3 per cent."}],[{"start":237.65000000000003,"text":"The Fed has swap lines with a select group of global central banks in the Eurozone, the UK, Canada, Switzerland and Japan. Those swap lines, which in theory are unlimited in scale, were designed to address strains in short-term dollar-funding markets. "}],[{"start":254.30000000000004,"text":"The Fed’s swap lines are not designed to address foreign exchange movements, such as those which have arisen during the Iran war."}],[{"start":261.70000000000005,"text":"The Fed declined to comment on Bessent’s remarks."}],[{"start":264.65000000000003,"text":"Additional reporting by Claire Jones in Washington"}],[{"start":276.05,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1776908409_2421.mp3"}