COMPONENTS OF CBUAE BANK SUPPORT SCHEMES

The CBUAE has been proactive in making liquidity available to the banking system through a range of measures such as zero cost funding, low cost funding and relaxed regulatory capital limits and liquidity rules. A total of Dh256 billion stimulus announced by the CBUAE includes a liquidity relief tool of Dh50 billion offered through banks to eligible customers who wish to apply for a loan deferment, Dh50 billion capital buffer relief, Dh95 billion liquidity buffer relief, and reduction by half the reserve requirements on demand deposits for all banks from 14 per cent to 7 per cent, adding Dh61 billion in liquidity support. In addition, in early August 2020, the Central Bank also announced liquidity support to banks by relaxing the existing thresholds of two prudential ratios: the Net Stable Funding Ratio (NSFR) and the Advances to Stable Resources Ratio (ASRR) by temporarily relaxing the requirements for improving the structural liquidity position of banks. These measures were aimed at enhancing the capacity of the banking sector to support the economy.