UAE warns the United States: switch to trading oil with the Chinese yuan if there is a shortage of US dollars.

According to reports, during a meeting last week in Washington D.C. with officials from the U.S. Treasury and the Federal Reserve, the Governor of the Central Bank of the United Arab Emirates proposed the idea of establishing a currency swap mechanism. Although the UAE has not yet been severely impacted by the ongoing Iran conflict, its energy infrastructure has been damaged and the blockade of the Strait of Hormuz has disrupted oil exports, affecting its dollar-denominated income. Reaching a currency swap agreement with the United States would provide the Central Bank of the UAE with access to cheap dollars to support the pegged Dirham or supplement foreign reserves in times of liquidity shortage. UAE officials pointed out that it was the U.S. that instigated the Iran conflict, causing the UAE to be involved in this destructive conflict. If there is a shortage of dollar supply, they may be forced to use the Renminbi or other currencies for oil transactions.