Spiralling demand for credit in the UAE

central bank pumps Dh11.3 billion in liquidity in June

ABU DHABI 2 August 2017: A total of Dh11.3 billion in cash was pumped by the UAE Central Banks through banks operating in the country during June, which accounts for 35.7 per cent of Dh31.6 billion in total funds provided by the bank throughout 2016. The move reflects the rising demand for credit in the market.

Within this context, certificates of deposit comprised Dh102.8 billion of the total liquidity provided in June against Dh114.1 billion in May, according to recent figures released by the bank.

Banking experts attributed the increase in cash provided by the Central Bank to the spiralling demand for credit in the market.

According to the bank’s statistics, the volume of funds pumped during Q1 2017 hit Dh7.01 billion while the two months of April and May saw a re-withdrawal of cash surplus before the Central Bank pumped back more liquidity.

Certificates of deposit represent one of the bank’s vehicles to manage liquidity in addition to other tools, including setting a compulsory surplus level, dollar barters, advance cash and overdraft facilities.

By Rajive Singh

Dubai Gazette