UAE Cen­tral Bank for­eign as­sets drop $12b in Jan­uary

The Pak Banker - - FRONT PAGE -

The UAE Cen­tral Bank's for­eign as­sets fell by $12 bil­lion in Jan­uary from the pre­vi­ous month as the Arab world's se­cond-big­gest econ­omy grap­ples with fall­ing oil prices and bets against its cur­rency. For­eign as­sets de­clined to Dh296.9 bil­lion from Dh341.1 bil­lion, ac­cord­ing to data posted on the cen­tral bank's web­site. Cash, bank bal­ances and de­posits with banks abroad dropped al­most 30 per cent to Dh122.2 bil­lion, while in­vest­ments in held-to-ma­tu­rity for­eign se­cu­ri­ties and other for­eign as­sets in­creased, ac­cord­ing to the data.

Oil pro­duc­ers in the six-na­tion Gulf Co­op­er­a­tion Coun­cil are see­ing their pub­lic fi­nances de­te­ri­o­rate as crude prices hover near 12-year lows. Net for­eign as­sets of the Saudi Ara­bian Mon­e­tary Agency, the king­dom's cen­tral bank, have fallen in the 11 months to De­cem­ber as the coun­try sought to bridge its bud­get deficit.

The drop in oil prices has also boosted spec­u­la­tion that coun­tries in the re­gion will be pushed to ad­just their cur­ren­cies' fixed ex­change rates to the dol­lar. Twelve-month for­ward con­tracts for the UAE dirham, used partly to bet on a de­val­u­a­tion of the cur­rency, climbed to 325 points last month, their high­est since 2009.

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