London – “Al-Quds Al-Arabi”:
The Central Bank of the United Arab Emirates moved again to “ambulance” The UAE economy The crisis, which was further aggravated by the Corona pandemic.
Today, Saturday, the bank said it had approved a temporary easing of two basic liquidity requirements to encourage banks to lend more to companies and the business sector as part of the government’s economic stimulus plan to counter the consequences of the Covid-19 pandemic.
Under the new easing, banks will be allowed, in relation to the ratio of net stable funding sources, to reduce the ratio to below 100 percent, but not less than 90 percent. As for the ratio of loans and advances to stable sources of funds, banks will be permitted to raise the prescribed ratio to above 100 percent, but not to exceed 110 percent. These measures will remain in effect until December 31, 2021.
According to “Reuters”, the central bank said in a statement: “This measure comes as an additional step to encourage banks to enhance their implementation of the economic support plan and support affected customers to face the repercussions of the Covid-19 epidemic.”
The Central Bank announced an economic stimulus package amounting to $ 70 billion to help the business sector and companies overcome the consequences of the pandemic. The central bank said in June the economy was likely to contract 3.6 percent this year.
The central bank added today, Saturday, that the aim of these ratios is to ensure that long-term assets are funded through stable financing sources.
“Facilitating the ratio of net stable sources of financing and the ratio of loans and advances to stable sources of funds will enhance the flexibility of banks in managing their balance sheets,” he said in the statement. (Dollar = 3.6728 UAE dirhams).
And she was International reports warned From the dual repercussions of the Corona virus and the collapse of oil prices on the UAE economy, and that Abu Dhabi, the richest emirate, and the capital of the country, will not be immune to the repercussions of the “frightening” situation in the emirate of Dubai.
The London-based financial consultancy, Capital Economics, warned that the spread of the new Corona virus has reduced its growth forecast in the Middle East for 2020 by 0.5 percent to 2 percent.
“The UAE economy is the weakest and the repercussions threaten to raise concerns related to Dubai’s debt,” the foundation said in a report.
Last month, Standard & Poor’s Global warned that Dubai economy It is heading for a contraction of 11 percent this year, at a time when it has lowered the credit rating of two real estate companies among the largest companies in the emirate to a high-risk position.
Standard & Poor’s said that Dubai, the center of trade and tourism in the Middle East, has been hit hard by measures aimed at containing the Corona virus and is heading towards an economic contraction nearly four times what happened during the global financial crisis in 2009.
“We currently expect Dubai’s GDP to shrink by about 11 percent in 2020, exacerbating the economic slowdown that began in 2015,” Standard analysts wrote in a note dated July 9, and added that the emirate’s fiscal deficit is expected to swell to around four percent of GDP. The total for the current year.