UAE banks' required reserves up in March

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ABU DHABI: In yet a fresh sign of the country's robust financial infrastructure, the UAE banks' reserve requirements picked up 7.7 percent during Q1 2020 to AED132.6 bn as compared to the corresponding period in 2019, statistics by the Central Bank of the UAE have shown.

According to a CBUAE report, the required reserves have been steadily growing over the recent months. In December 2019, they increased to AED129.7 bn from AED126.2 bn in September same year.

In January 2020, the required reserves climbed to AED130.8 bn, edging down to AED130.1 bn in February, before rebounding to AED132.6 bn in March.

Earlier this month the CBUAE reduced banks’ reserve requirements for demand deposits by 50 pct to support the country’s economy during the COVID-19 pandemic. This will inject liquidity of about AED61 billion, which can be used to support banks’ lending to the UAE economy and their liquidity management.

The CBUAE has further extended the duration of the Targeted Economic Support Scheme, TESS, for affected retail and corporate customers and made other enhancements to the scheme. Banks and finance companies participating in the TESS programme will be able to extend to their customers’ deferrals of principal and interest until 31 December 2020