UAE central bank not changing bank reserves
DUBAI: The United Arab Emirates' central bank has no intention of changing the minimum reserves for banks as liquidity of banks operating in the country was good, a senior central bank official was quoted as saying on Wednesday.
The central bank of the UAE, the world's third biggest oil exporter, had no intention to modify the minimum mandatory reserves for banks at the current stage, Seif al-Shamsi, executive director for the treasury department at the UAE Central Bank, told Arabic language daily Al-Khaleej newspaper. Lending in the UAE's banking sector have almost come to a standstill when the financial crisis and the Dubai debt crisis hit the region and the emirate's realestate driven boom came to a halt. Measures adopted by the central bank regarding banks' liquidity reflect good conditions and do not call for central bank intervention, Shamsi told the paper. Money supply (M3) in the Arab world's second-largest economy grew 5.1 percent year- on-year in October, the fastest rate this year, after a 2.0 percent rise in the previous month, central bank data showed.
Bank provisions for bad loans rose to 39.6 billion UAE dirhams in October, the highest level this year, up 4.8 percent from September and 36.6 percent from October 2009. The UAE finance ministry said this month it expected to launch a new credit bureau within the next six months to help banks, already exposed to debts of Dubai's state-linked companies, assess individuals' credit worthiness. The central bank has given banks operating in the country facilities with maturities of not more than three months in September 2008 to help them cope with the effects of the global financial crisis. UAE inter-bank rates have stayed high over past months, sparking criticism from the central bank, with banks exposed to Dubai debt, but debt restructuring and a flood of dollar liquidity on global markets have helped to ease pressure. -PB News