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|17 October, 2018

UAE banks issue $3.32bln worth letters of credit in eight months

The growth in the use of these letters reflects the momentum witnessed across non-oil sectors

Image used for illustrative purpose. A customer makes a transaction at Emirates Bank in Dubai March 7, 2007.

Image used for illustrative purpose. A customer makes a transaction at Emirates Bank in Dubai March 7, 2007.

REUTERS/Mohammed Salem

ABU DHABI - The value of letters of guarantee issued by UAE banks to their customers, including institutions and companies operating across various economic sectors, amounted to AED12.2 bn during the first eight months of the year, bringing to AED96.8 bn the total value of these letters, according to data released by the Central Bank of the United Arab Emirates.

The growth in the use of these letters reflects the momentum witnessed across non-oil sectors since the beginning of the year following the state of lull that prevailed in the wake of the deceleration that hit the global economy.

During Q1, the value of the letters of guarantee issued by the banks amounted to AED1.7 bn. In Q2 the value reached AED9.5 bn, bringing to AED95.8 bn the total value of letters issued by these banks.

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In July, letters of credit worth AED2.1 bn were issued, bringing to AED97.9 bn the total value of these documents, before their value went down to AED96.8 bn by the end of August.

Over the coming next months, banks are expected to intensify the issuance of these documents to keep pace with the growth in non-oil activities.

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