DUBAI - Central banks need to act in "a careful and phased manner" to avoid a sharp deterioration of credit supply when their economies are in a position to recover from the COVID-19 crisis, the UAE central bank governor Abdulhamid M. Saeed Alahmadi said.
His comments, made in a speech to a conference of central bankers from emerging markets, were published on Thursday by the central bank.
The central bank has reduced its policy interest rate twice this year and announced a $70 billion package of measures as the coronavirus crisis hit vital sectors of the country's economy.
The governor's comments echoed similar remarks this week by the governor of the Saudi central bank, Ahmed al-Kholifey, who called for caution against a deterioration of asset quality as central banks look to "unplug life support" to their economies.
Business conditions in the non-oil private sectors of Saudi Arabia and the United Arab Emirates, the Gulf's two largest economies, have worsened last month, business surveys showed, as firms cut job amid sluggish economic activity.
(Reporting by Maher Chmaytelli and Davide Barbuscia Editing by Gareth Jones and Peter Graff) ((email@example.com;))