United Arab Emirates is in discussions with the United States over a potential currency swap arrangement, according to the UAE’s trade minister.
“We have this discussion and conversation with many, it’s part of an elite group that the US is having this swap policy with. They are only having it with five countries,” said Thani Al Zeyoudi during an event in Abu Dhabi.
“Being part of that group means that transactions… trade, investments between both nations reach a level where that swap is highly needed … so it is an elite matter, (it) is not about bailing out,” he added while speaking at the “Make It In The Emirates” conference.
Currency swap agreements between central banks allow both sides to access each other’s currency directly, avoiding foreign exchange markets and helping reduce transaction costs and exchange-rate risks in trade and investment.
The Federal Reserve currently maintains permanent currency swap lines with five major central banks: the Bank of Canada, Bank of Japan, European Central Bank, Bank of England, and Swiss National Bank.
