Jul 23 2012
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UAE govt has no immediate need to issue bonds - paper
DUBAI, July 23 (Reuters) - The United Arab Emirates has no immediate need to issue bonds to cover a small budget deficit this year as it can plug the shortfall from its own resources, the Gulf country's finance minister was quoted as saying on Monday.
The comments by Finance Minister Sheikh Hamdan bin Rashid al-Maktoum, brother of Dubai's ruler and his deputy, suggest that a long-awaited debt law, which needs to be passed before the UAE can issue federal bonds, may not be imminent.
Until now the respective governments of some of the UAE's seven emirates have issued bonds separately.
"The government is not in a dire need for issuing bonds," Sheikh Hamdan was quoted as saying in Al Ittihad newspaper on Monday.
Sheikh Hamdan rarely speaks to the media and his comments are the strongest indication yet that the UAE, which ran up its first deficit in seven years in 2011, does not plan to raise money to cover an expected shortfall this year.
In October, the UAE government approved a draft 2012 federal budget of 41.8 billion dirhams ($11.4 billion) with a projected shortfall of 400 million dirhams.
The new debt law is aimed at establishing a local debt market but it has been under discussion for more than two years and there is still no clear indication of when it will be passed.
The UAE's federal budget accounts for 11 percent of overall government spending in the UAE. Spending by individual governments in the emirates makes up the rest.
The UAE ran an estimated deficit of 2.9 billion dirhams ($790 million) in 2011, according to a report by the International Monetary Fund based on government data, released in June.
($1 = 3.673 UAE dirhams)
(Reporting by Mahmoud Habboush; Editing by Susan Fenton)
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Keywords: EMIRATES FINMIN/BONDS
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