NPR.

This is the indicator from Planet Money. I'm Adrienne Ma.

And I'm Patty Hirsch. The United Arab Emirates, one of the wealthiest of the Gulf states, and home to the vaunted city of Dubai,

has requested something called a currency swap line from the U.S.

And it's not just the UAE.

Treasury Secretary Scott Besson said a number of allies in the Gulf region and in Asia have requested swap lines, although he did not say which those countries are.

He said they would need those lines, that access to U.S. dollars, to help deal with energy shocks, another fallout from the Middle East War.

He also said the U.S. would benefit from providing a swap line to the UAE.

Now, there's some talk that the UAE's withdrawal from the OPEC cartel this week might have been part of a swap line deal, but that hasn't been confirmed.

And we've talked about currency swap lines on the show before, like the one the U.S. extended to

Argentina last year. But on today's show, we'll explain just how currency swap lines work,

and why the UAE and maybe some other countries might need them.

That's all coming up after the break.

A currency swap is, well, it's just what it sounds like.

One country or a country's central bank swaps a chunk of its currency for another currency.

So in this case, if President Trump approves this swap line to the United Arab Emirates,

the U.S. would swap a certain amount of dollars for UAE Durham's for a certain period of time,

but probably not right away.

Rachel Ziemba is an economic risk specialist and a senior fellow at the Center for a New American Security.

So typically a swap line works that there is an option to draw on the liquidity rather than one

needs to. Liquidity, the ability to turn on the dollar tap and make that money flow. The U.S.

has extended that privilege via currency swap lines many times in the past, including, of course, to

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