UAE financial system is stable; economic recovery looks imminent - Central Bank

Banks need to do their part now by ensuring credit flow, Khaled Mohamed Balama said

General view of Central Bank of The U.A.E. on January 3, 2017 in Dubai, United Arab Emirates.

General view of Central Bank of The U.A.E. on January 3, 2017 in Dubai, United Arab Emirates.

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The UAE’s financial system is stable and economic data points to a post-pandemic recovery. However, banks should support the recovery by ensuring flow of credit to the economy, UAE Central Bank Governor Khaled Mohamed Balama said.

Liquidity and capital buffers of banks remain adequate, supported by stable deposit volumes and growth in capital market funding, he said during a meeting on Tuesday with all banks operating within the country.

“Our assessment and recent economic data point to a post-pandemic rebound of the UAE economy. The UAE banking system remains resilient, and our support measures in the form of the CBUAE’s Targeted Economic Support Scheme and other measures will remain in place until the middle of next year,” Balama said in a statement issued by the monetary authority.

“Against this background, we expect banks to support the economy and ensure a continued flow of funds to creditworthy retail and corporate clients,” he added.

Earlier in April, the central bank had said TESS, which was introduced last March to provide support to businesses and households during the pandemic, would be extended to June 2022.

The programme’s zero-cost facility enables banks to access some 50 billion dirhams in funds to help customers get temporary relief in terms of their repayments and interest due on their borrowings.

UAE has been aggressively vaccinating its population to allow a return of economic activity in the months leading up to the mega Expo event in October.

(Writing by Brinda Darasha; editing by Seban Scaria)

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