Abu Dhabi, UAE – The Board of Directors of the Central Bank of the UAE, chaired by Mansour bin Zayed Al Nahyan, approved a comprehensive support package to enhance the resilience of financial institutions. This package comes as part of efforts to maintain the stability of the UAE banking sector amidst exceptional global and regional circumstances.
banking sector resilience
During its meeting, the Council reviewed the strength of the UAE’s financial system, affirming its resilience to global turmoil. This is underpinned by robust foundations, including foreign exchange reserves exceeding AED 1 trillion, a monetary base coverage ratio of 119%, and a banking sector size of AED 5.4 trillion.
Multi-axis support package
The package included five key pillars, among them enhancing banks’ access to liquidity. This was achieved by allowing the use of a portion of mandatory reserves. It also included providing financing facilities in dirhams and dollars, along with a temporary reduction in liquidity and funding requirements. Furthermore, it granted additional flexibility in the use of capital to support economic activity.
Credit support and financing continuity
The measures also included flexibility in credit risk management, allowing banks to postpone the classification of debts owed by affected individuals and companies. Furthermore, the bank emphasized the need for banks to continue providing the necessary financing to support customers and the national economy. The bank also expressed its readiness to utilize all monetary policy tools to enhance financial stability.
