The UAE Central Bank said that M1 money supply, which includes currency in circulation outside banks plus monetary deposits, rose by 0.3 percent to 644.4 billion dirhams ($175 billion) at the end of March 2021 from 642.3 billion dirhams at the end of April.
Money supply M2, which includes longer-term deposits, fell by 1.7 percent from 1.48 trillion dirhams at the end of March 2021 to 1.46 trillion dirhams at the end of April.
The aggregate money supply, M3, fell by 0.1 percent, falling from 1.76 trillion dirhams at the end of March to 1.76 trillion dirhams at the end of April.
The increase in M1, the most liquid portion, was due to 1.7 billion dirhams rise in currency in circulation and a 0.4 billion dirhams rise in monetary deposits.
M2 decreased due to 27.1 billion dirhams reduction in quasi-monetary deposits, offsetting the increase in M1.
M3 fell due to the decline in M2, offsetting 23.4 billion dirhams increase in government deposits.
In March the Central Bank said liquidity in the banking system had returned to pre-COVID levels. Despite that, the monetary authority said in April that its 50-billion-dirham zero-cost funding programme, launched a year ago under Targeted Economic Support Scheme, would be extended until the end of June 2022.
The programme was set up to help banks maintain funding flows through the economy to mitigate the impact of the pandemic.
(Writing by Brinda Darasha; editing by Seban Scaria)
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© ZAWYA 2021