Sharjah has unveiled a Dh4 billion to financial stimulus package to alleviate the adverse economic fallout of Covid-19 on businesses and individuals.
The Sharjah Liquidity Support Mechanism (SLSM), set up by Sharjah Finance Department, seeks to enhance liquidity for the emirate's banking system. This move facilitates the provision of additional financial assistance to all businesses impacted by the lockdown in the wake of the pandemic outbreak.
The Sharjah move to inject liquidity to fight the fallout of the business standstill is among a series of bold and proactive initiatives undertaken in the UAE by the federal and local governments as well as scores of government-related entities.
"The SLSM Sukuk, issued as a 12-month dirham-denominated paper in several tranches, represents the first rated short-term local currency tradeable instrument in the UAE, which can be used for liquidity management by banks," the Sharjah Finance Department said.
The first tranche of the SLSM was subscribed to by Bank of Sharjah with a Dh2 billion participation. Subsequent tranches with one or more other banks are expected to expand the SLSM to Dh4 billion.
This paper has a short-term investment grade rating of A-2 by Standard & Poor's rating agency.
Waleed Al Sayegh, director-general of Sharjah Finance Department, said the authorities in Sharjah and across the region are taking the required measures to provide maximum assistance to all businesses dealing with the impact of the outbreak.
"This service will allow banks to use the Sukuk as security to access liquidity facilities at the UAE Central Ban, by following the required guidelines," said Al Sayegh.
The SLSM is the latest in a spate of stimulus packages and measures the Sharjah government has introduced to support companies and individuals, he said.
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