Treasury Secretary Scott Bessent said Wednesday that “many” oil-rich U.S. allies in the Persian Gulf have requested a financial backstop amid economic turbulence from the war with Iran.

Bessent’s comments go further than White House assertions to CNBC on Tuesday, where an official said the U.S. had not yet been formally asked to establish a currency swap line by the United Arab Emirates, only that there had been discussions about the topic.

Such a swap line would provide the UAE or other Gulf nations with liquidity in the U.S. dollar, but comes loaded with political risk as U.S. consumers weather higher prices from the war for food, gas and other everyday purchases.

“Many of our Gulf allies have requested swap lines,” Bessent said. “Swap lines, whether it’s from the Federal Reserve or the Treasury, are to maintain order in the dollar funding markets and to prevent the sale of the U.S. assets in a disorderly way.”

“The swap line would both benefit the UAE and the U.S., and as I said, numerous other countries, including some of our Asian allies [who] have also requested them,” he said, without specifying which other countries.

Gulf countries, including the UAE, have been hit hard by the war with Iran. Tehran has fired missiles at U.S. allies in the region, damaging economic infrastructure. Iran’s closure of the Strait of Hormuz has also choked oil revenues that are critical to Gulf nations.

A currency swap could also be necessary to ensure the U.S. dollar, which is dominant in nearly all oil exchanges, remains in use.

President Donald Trump said on CNBC’s “Squawk Box” on Tuesday that he would like to assist the UAE if it’s possible.

“If I could help them, I would,” the president said.

Sen. Steve Daines, R-Mont., who serves on both the Senate Finance and Foreign Relations committees, was supportive of a currency swap with the UAE in a Tuesday interview with CNBC.

Daines said he thinks “[Bessent] is moving in that direction, and I support him in that.” 

Democrats, however, are likely to take advantage of the political opening from a currency swap, especially with wealthy nations in the Middle East. The UAE has one of the highest per capita incomes in the world.

Sen. Chris Van Hollen, D-Md., who questioned Bessent on the potential currency swap at the hearing, highlighted the domestic economic circumstances under which a swap would occur.

“The war in Iran has already cost us dearly, Van Hollen said. “In addition to lives lost, we’re talking about over a billion dollars a day in taxpayer money, we’re talking about higher gas prices, higher prices overall, and now we understand that the UAE is asking you to provide them a swap line through the Exchange…

The White House has discussed offering a financial lifeline to the United Arab Emirates as the U.S. war with Iran wreaks havoc on the Gulf state’s economy, a White House official told CNBC.

The UAE has not formally requested a currency swap line, and plans are not currently being drawn up, the official said, speaking on condition of anonymity to talk about nonpublic plans. Still, it is being discussed within the administration, the person said. Such a move would provide liquidity in dollars to the oil-rich UAE, but could be politically tenuous for the administration as U.S. consumers grapple with higher prices at home.

The UAE and other Persian Gulf nations have been hit hard by the U.S. war with Iran. Tehran has fired troves of missiles at the U.S.’ regional allies, damaging economic infrastructure. Iran’s closure of the Strait of Hormuz has also largely choked off oil exports that the UAE depends on for cash flow.

The UAE is a particularly close ally of the Trump administration, and has labored to extend overtures to Washington since Trump returned to the White House. The country committed to invest more than $1 trillion in the U.S. last year. The leaders of the Gulf nation are also reportedly intertwined with President Donald Trump‘s family business.

Trump, on CNBC’s “Squawk Box” Tuesday, appeared to say that he was willing to assist the UAE when asked directly about whether a currency swap was under consideration.

“If I could help them, I would,” the president said. “It’s been a good country. It’s been a good ally of ours.”

A potential currency swap line comes with political risk for Trump, however, as U.S. voters could view it as a bailout of a foreign country — and a wealthy one — while American consumers are swallowing higher prices.

The White House official said Trump sees the UAE as a major ally of the U.S. and is open to helping them, but cautioned that a swap is still “something we’re thinking about considering.”

A key Republican lawmaker on Tuesday appeared to be cautiously supportive of a potential swap.

“They’re such a strong ally in the Middle East, I think we should look at what needs to be done to help them through this difficult time,” Sen. Steve Daines, R-Mont., who sits on the Senate Finance and Foreign Relations Committees, said in a brief interview. “[Treasury] Secretary Bessent, he’s good at a lot of things, the one thing he’s really good at in his own experience before he was secretary was currency swaps.”

“I think it’s something that the secretary is moving in that direction, and I support him in that,” he said.

Democrats, however, are deeply skeptical of any deals the administration may make with the UAE.

“Anytime I’ve seen the president doing anything else with the UAE is to the benefit of the Trump family,” said Rep. Gregory Meeks, D-N.Y., the top Democrat on the House Foreign Affairs Committee. “I understand the UAE has been hit hard in that regard, and I want to make sure we help…

The lack of progress on the U.S.-India trade deal, compounded by persistent outflows in foreign funds, has weighed on the rupee this year, making it Asia’s worst-performing currency.

The world’s fifth largest economy could see its currency drop to 92 against the dollar by end-March, Nomura and S&P Global Market Intelligence forecast, with any strengthening largely hinging on a trade deal with the U.S. The rupee was last trading at 89.6 against the dollar.

“We believe the rupee to be undervalued currently, with correction anticipated after there is more clarity on the U.S.-India trade agreement,” said Hanna Luchnikava-Schorsch, S&P Global Market Intelligence’s head of Asia-Pacific economics.

The S&P Global unit expects a trade deal over the next six months.

India is among the highest tariffed countries in the world at 50% — levies that dwarf even those on China — as trade talks between New Delhi and Washington continue to drag on.

After steep tariffs came into force in August, India’s exports to the U.S. fell nearly 12% in September and 8.5% in October, though they rebounded sharply in November, rising 22.6%.

The main economic risk is that India could lose the momentum in supply chain shifts from firms that cater mainly to the U.S. market, due to sustained high tariffs, said Sonal Varma, Nomura’s chief economist, India and Asia ex-Japan.

“Prolonged uncertainty has led to foreign portfolio outflows, and a weaker rupee can affect import costs and inflation,” she added.

A weak rupee though could make exports more competitive, with low price growth in the country also allowing it to absorb the impact of imported inflation due to currency depreciation.

At the start of the month, the Indian currency breached the 90-mark against the greenback, an important psychological trigger, having started the year at 85.64 to a dollar. It took less than 15 trading sessions for the currency to cross 91-rupee to a dollar mark.

Global investors have been bearish on India for most of this year, with net outflows of more than $10 billion across investment classes so far this year, data from securities depository NSDL shows.

The key reason for the fall in rupee is not India’s current account deficit as it is expected to be in the manageable level of 1%-1.5%, Somnath Mukherjee, CIO and senior managing partner at ASK Private Wealth, told CNBC’s “Inside India.”

He added the rupee will stay under pressure until there’s a reversal of outflows of foreign portfolio investors.

Outflows were particularly sharp in Indian equities with foreign portfolio investors being net sellers on a year-to-date basis, withdrawing nearly $18 billion as of Dec. 19.

“The depreciation of the rupee is a double-edged sword for FIIs” said Luchnikava-Schorsch.

While it could be “a good entry…