UAE: dollar peg not at risk

Reports that the UAE is seeking a currency swap line from the US have sparked concerns about the damage to country’s external position from the war. Lower energy exports, disruption to travel and tourism as well as the likelihood of capital flight are likely to have strained the UAE’s balance of payments. But the UAE’s enormous foreign currency savings mean that there is little concern that the dollar peg will come under serious pressure any time soon, even if the war were to be protracted.