Treasury Secretary Scott Bessent said several Asian and Gulf countries, including the United Arab Emirates, have requested dollar swap lines as a backstop following US and Israel attacks on Iran. Countries are seeking protection against economic fallout as higher oil prices heighten concerns about dollar liquidity. Gulf states maintain dollar pegs, making them vulnerable to currency volatility.

However, analysts warn Bessent's ability to deliver is constrained by the Treasury's limited firepower. Any swap facility would come from the $219bn Exchange Stabilisation Fund — a far smaller pool than the Federal Reserve's potentially unlimited capacity. The contrast is stark: the UAE holds nearly $300bn in reserves and manages $2tn in sovereign wealth funds, yet would theoretically borrow from such a modest US instrument.

The Fed hasn't been formally consulted, and it views swap lines as a tool for short-term dollar funding needs that don't currently exist. Analysts suggest this may be more about political signaling than actual liquidity crunch. "It would be a vote of confidence in the relationship between the US and the UAE," said Shahab Jalinoos, head of G10 foreign exchange strategy at UBS.