May 14, 2026 | The Wall Street Journal
This Economic Weapon Is Worth Congress’s Attention
Currency swap lines are useful foreign-policy tools, but current law limits their availability.
May 14, 2026 | The Wall Street Journal
This Economic Weapon Is Worth Congress’s Attention
Currency swap lines are useful foreign-policy tools, but current law limits their availability.
Excerpt
Washington has a foreign-policy lever that costs almost nothing, earns interest and might have helped break up the Organization of the Petroleum Exporting Countries. Currency swap lines are one of many economic implements the Trump administration has creatively deployed—only to find them constricted by outdated regulations. Congress must step in and modernize the U.S. economic statecraft tool kit.
Last month, Treasury Secretary Scott Bessent endorsed the idea of an emergency swap line to the United Arab Emirates. The U.S. would lend dollars to the U.A.E., and the U.A.E. would provide an equivalent amount of its local currency. At maturity, the principal amounts would be traded back. The U.S. earns interest for the duration of the swap while helping the U.A.E. stabilize its markets.
Ms. Dezenski is senior director of the Center on Economic and Financial Power at the Foundation for Defense of Democracies.