Money Supply aggregate M1 hits Dhs644.4b: CBUAE

The Central Bank of the UAE (CBUAE) has announced that the Money Supply aggregate M1 increased 0.3 per cent, from Dhs642.3 billion at the end of March 2021 to Dhs644.4 billion at the end of April 2021.

The Money Supply aggregate M2 decreased to Dhs1462.5 billion at the end of April 2021, meanwhile, the Money Supply aggregate M3 reduced to Dhs1764.8 billion at the end of April 2021.

The Monetary Base contracted by 1.4 per cent falling from Dhs437.1 billion at the end of March 2021 to Dhs430.8 billion at the end of April 2021. The main driving force behind this fall in the Monetary Base was 20.0 percent and 3.7 per cent decrease in Reserve Requirements and Certificates of Deposit & Monetary Bills, respectively.

Currency Issued and Banks & OFCs’ Current Accounts & Overnight Deposits of Banks at CBUAE rose by 2.2 per cent and 20.5 per cent, correspondingly.

Gross banks’ assets, including bankers’ acceptances, fell by 0.2 per cent to Dhs3169.3 billion at the end of April 2021.

Gross credit increased by 0.5 percent from Dhs 1754.4 billion at the end of March 2021 to Dhs1763.2 billion at the end of April 2021. Gross Credit rose because of 0.5percent and 0.3 per cent increases in Domestic Credit and Foreign Credit, respectively.

The rise in Domestic Credit was mainly due to a 1.3 per cent, 0.4 per cent and 4.9 per cent increases in credit to Public Sector (GREs), credit to Private Sector and credit to Non-Banking Financial Institutions, respectively. Overshadowing a 0.1 per cent reduction in credit to Government Sector.

Total bank deposits decreased by 0.2 per cent, falling from Dhs1881.3 billion at the end of March 2021 to Dhs1877.3 billion at the end of April 2021, attributable to 0.7 percent reduction in Resident Deposits, overriding a 3.8 percent rise in Non-Resident Deposits.

Resident Deposits fell mainly due to 12.5 per cent and 6.4 per cent reductions in GREs Deposits and Non-Banking Financial Institutions’ Deposits, respectively. Superseding the 5 percent rise in Government Sector Deposits.

Liquid assets held by UAE-based banks increased 2.6 percent to Dhs486.58 billion in Q1’21 from Dhs474.136 bn in the last quarter of last year, according to the UAE Central Bank’s Core Financial Soundness Indicators report, released Monday.

The steady growth in liquidity is yet a new sign of the gradual economic recovery underway across all sectors, primarily the retail and commercial platforms, despite the economic fallout from the pandemic.

Liquid assets accounted for 15.9 percent of the total assets by the end of the reference quarter, according to the report.

Liquid assets consist of eligible liquid assets (cash in hand, banks’ liquid assets at the Central Bank and eligible bonds/ sukuks as prescribed by CBUAE regulation) interbank placements; and interbank lending covered by repurchase agreements per the FSI Compilation Guide issued by IMF.

Meanwhile, the Central Bank of the UAE (CBUAE), the Securities and Commodities Authority (SCA), the Dubai Financial Services Authority (DFSA) of the Dubai International Financial Centre (DIFC), and the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM) have jointly launched a four-week public consultation on proposed “Guidelines for Financial Institutions Adopting Enabling Technologies”.

The consultation launched today sets out principles for cross-sectoral such as banking, insurance, asset management and securities, and best practices for financial institutions when adopting enabling technologies for the development or offering of innovative products and services.

The enabling technologies include Application Programming Interfaces, Big Data Analytics and Artificial Intelligence, Biometrics, Cloud Computing, and Distributed Ledger Technology.

The objectives of these Guidelines are to promote the safe and sound adoption of these technologies by financial institutions across the UAE, so that the risks arising from the adoption of innovative activities are proactively and appropriately managed.

In drawing up the Guidelines, the Regulators have considered both international standards and industry best practices.

The Guidelines will apply to all financial institutions that are licensed and supervised by any of the Regulators and who utilise the enabling technologies, irrespective of the financial activities conducted.