ABU DHABI 16 June 2018: The Central Bank of the UAE (CBUAE) announced that effective Thursday, 14 June 2018, it has raised interest rates applied to the issuance of its Certificates of Deposits.
The decision is in line with the increase in interest rates on US Dollar, following the Federal Reserve Board’s decision to increase the Federal Funds Rate by 25 basis points at its meeting.
The Repo Rate applicable to borrowing short-term liquidity from CBUAE against Certificates of Deposits has also been increased by 25 basis points to 2.25%, said Wam.
Certificates of Deposit, which CBUAE issues to banks operating in the country, are the monetary policy instrument through which changes in interest rates are transmitted to the UAE banking system.
Exchange Houses Downgraded
The Central Bank announced that it has decided to downgrade the license of the following exchange houses to deal in sale and purchase of foreign currencies and travelers cheques only:
1. Taher Exchange Est.
2. Al Hadha Exchange LLC
3. Al Hemriya Exchange Company LPC
4. Dubai Express Exchange
5. Sanaa Exchange
6. Cosmos Exchange
7. Bin Bakheet Exchange Est.
As the above exchange houses violated Central Bank’s regulations, including Anti-Money Laundering regulations.
Based on this decision, the above exchange houses were prohibited from conducting any activities relating to remittances or payment of wages. This decision comes after the failure of these exchange houses to regularise their status during the grace period granted by the Central Bank .
The Central Bank confirms that it will not tolerate violations of financial institutions to its regulations and instructions, and the Central Bank alerts not to remit funds or pay of wages via the above exchange houses.