Emirates News Agency – The Central Bank continues its commitment to support the recovery and confirms that the withdrawal of support packages will be gradual and in a timely manner

0
14


ABU DHABI, September 23 / WAM/ His Excellency Khalid Mohammed Balama, Governor of the Central Bank of the United Arab Emirates, held a meeting yesterday with the CEOs of a number of national and foreign banks operating in the country, in the presence of His Excellency Abdulaziz Al Ghurair, Chairman of the Board of Directors of the Emirates Banks Federation.

The discussions focused on the Central Bank’s assessment of the financial stability in the country, in addition to the Central Bank’s plans to gradually withdraw the exceptional support packages that it had launched.

His Excellency Khalid Mohammed Balama, Governor of the Central Bank, said: “Our assessment, confirmed by recent economic data, shows the continued gradual recovery of the UAE economy. As we approach the post-pandemic recovery phase, there will be less need for exceptional support packages.

We expect banks to play their part in supporting the economic recovery and ensuring that funds continue to flow to creditworthy individual and corporate borrowers.”

His Excellency the Governor discussed with the banks the latest assessment conducted by the Central Bank on financial stability, explaining that the financial system of the UAE is stable, as a result of the continued economic recovery. On the other hand, liquidity in the banking system has remained high and capital buffers for banks are at adequate levels, and the Central Bank will continue to supervise the quality of banks’ assets and the adequacy of provisions.

In light of the gradual improvement of economic activity, the Central Bank will begin a gradual and deliberate process of withdrawing the support packages that it has issued within the targeted comprehensive economic support plan, so as not to negatively affect credit transactions and economic growth.

The participants in the meeting also expressed their views and unanimously agreed on the effectiveness of the plan in achieving its objectives of mitigating the negative effects of the Covid-19 pandemic on the country’s economy. 15% of bank loan portfolios benefited from the loan repayment deferral program included in the mentioned economic support plan.

The Central Bank also confirmed that in the short term it will keep the reduced required reserve requirements for banks, and the level of the loan-to-value ratio currently applied to mortgage loans granted to first-time homebuyers, temporarily unchanged.

The Central Bank announced earlier that the loan deferral program will cease by the end of 2021, while the Central Bank’s zero-cost lending facility will continue to be used in granting new loans until mid-2022.

It should be noted that the Central Bank had previously announced that its measures to ease regulatory requirements that allow banks to maintain lower capital buffers and liquidity buffers will expire at the end of 2021. The Central Bank will closely monitor the economic recovery and demand for loans, and may consider extending these measures for a limited period To ensure the continuity of economic recovery.

-He praised-

WAM/ Ahmed Al Nuaimi/ Islama Al Hussein





LEAVE A REPLY

Please enter your comment!
Please enter your name here