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The U.S. Secretary of the Treasury, Scott Bessent, publicly supported the expansion of dollar swap lines to Gulf and Asian allies last Tuesday, framing it as a key strategy to maintain the dollar's primacy in the global economy.
Bessent made the statement on the same day he testified before a Senate Appropriations subcommittee, where he confirmed that Gulf and Asian allies have formally requested these swap lines to stabilize their dollar-denominated financial markets.
"The conversations with countries, including our allies in the Gulf and Asia, regarding dollar exchange lines are part of ongoing and routine discussions that the Treasury has held with our partners for several years. They are a testament to the primacy of the dollar and the strength of the economic shield of the United States," Bessent stated before the subcommittee.
The governor of the central bank of the United Arab Emirates raised the idea during recent meetings with Treasury officials, according to sources close to the negotiations. United Arab Emirates would be one of the main beneficiaries of such a bilateral agreement.
The geopolitical context adds urgency to these negotiations: the Strait of Hormuz has remained closed since February 28, which has created significant pressure on the financial markets in the region and has increased the demand for dollar liquidity among Gulf countries.
The initiative also responds to the advancement of alternative payment systems driven by the BRICS, which aim to reduce global dependence on the US dollar in international transactions.
The dollar currently holds between 58% and 59% of global international reserves, a dominant position that Washington seeks to strengthen through these exchange agreements with strategic economies.
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