UAE cen­tral bank not chang­ing bank re­serves

The Pak Banker - - Company & Boss News -

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

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