The UAE has reportedly threatened to replace Chinese currency in the oil trade as it presses Washington for financial support.
The United Arab Emirates has warned the US Treasury that this could happen “Forced to use Chinese yuan” In oil trading, the Wall Street Journal reported Sunday.
UAE Central Bank Governor Khalid Mohammed Balama gave what the newspaper reported “Implied Threat” against the dollar’s dominant position during a meeting with US Treasury Secretary Scott Besant in Washington last week, the outlet said, citing unnamed US officials.
Balama reportedly pointed out that Abu Dhabi may need a lifeline to prevent a dollar liquidity crisis if the economic damage from the US war against Iran continues to mount.
Tehran has adopted a strategy of asymmetric pressure aimed at increasing costs for Washington and its allies. The UAE bore the brunt of Iranian retaliation against US military bases and other high-value locations, with more than 2,800 drones and missiles reportedly fired at the country.
The US Treasury may offer currency swaps, although this type of arrangement is usually controlled by the Federal Reserve. The WSJ said Fed approval was unlikely for the UAE and cited a precedent last year in which a $20 billion support package was arranged by the Treasury for Argentina ahead of a key election.
The administration of US President Donald Trump had previously floated the idea of ​​having Gulf countries partially cover the costs of the Iran war. Harvard Kennedy School professor Linda Bilmes estimated that the United States spent $2 billion per day in direct costs in the first 40 days of the conflict.
Arabs’ frustration with US policies has been revealed in public comments from figures associated with Gulf governments. On Sunday, Abdulkhaleq Abdullah, a former adviser to UAE President Mohammed bin Zayed, called for the closure of US military bases in the country, arguing that they are a burden rather than a strategic asset. Instead he advocated prioritizing the acquisition of advanced American weapons as an alternative national defense strategy.
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Iran is also collecting payments for ships passing through the Strait of Hormuz, which it considers neutral in the conflict, demanding payment in yuan or cryptocurrency – which helps it avoid US financial controls and possible sanctions.
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