Gross credit rose due to increases in domestic credit by 0.8 per cent and in foreign credit by 2.9 per cent.

The Central Bank of the UAE (CBUAE) revealed that total gross banks’ assets, including bankers’ acceptances, rose by 0.5 per cent from Dhs4,287.0 billion at the end of May 2024 to Dhs4,310.2 billion at the end of June 2024.

In its Monetary and Banking Developments for June 2024, the Central Bank said Gross credit grew by 1.1 per cent from Dhs2,077.7 billion at the end of May 2024 to Dhs2,100.9 billion at the end of June 2024.

Gross credit rose due to increases in domestic credit by 0.8 per cent and in foreign credit by 2.9 per cent.

The bank stated that domestic credit expansion was due to increases in credit to the public sector (government-related entities) and the private sector by 1.4 per cent and 1.0 per cent, respectively, offsetting the 1.1 per cent and 0.6 per cent reductions in credit to the government sector and credit to the non-banking financial institutions.

Banks’ deposits rose by 0.5 per cent, from Dhs2,678.2 billion at the end of May 2024 to Dhs2,692.5 billion at the end of June 2024. The growth in total bank deposits was due to the rise in non-resident deposits by 8.4 per cent, overshadowing the fall in resident deposits by 0.1 per cent.

According to the CBUAE, resident deposits fell as a result of reductions in; government sector deposits by 3.0 per cent and in government-related entities deposits by 0.1 per cent. Whereas, private sector deposits increased by 0.4 per cent and non-banking financial institutions deposits rose by 6.6 per cent, at the end of June 2024.

Banking Developments: The Central Bank announced that the money supply aggregate M1 increased by 0.6 per cent, from Dhs879.2 billion at the end of May 2024 to Dhs884.1 billion at the end of June 2024. This was due to Dhs7.3 billion rise in monetary deposits, overriding Dhs2.4 billion reduction in currency in circulation outside banks.

The money supply aggregate M2 rose by 0.4 per cent, from Dhs2,160.3 billion at the end of May 2024 to Dhs2,169.4 billion at the end of June 2024. M2 increased because of an elevated M1 and Dhs4.2 billion rise in Quasi-Monetary Deposits.

The money supply aggregate M3 also increased by 0.1 per cent, from Dhs2,629.7 billion at the end of May 2024 to Dhs2,632.0 billion at the end of June 2024. M3 expanded due to the growth in M2, overshadowing the Dhs6.8 billion reduction in government deposits.

The monetary base shrank by 0.3 per cent, from Dhs727.1 billion at the end of May 2024 to Dhs725.0 billion at the end of June 2024. The fall in the monetary base was driven by reductions in; currency issued by 2.3 per cent, banks and OFCs’ current accounts and overnight deposits of banks at CBUAE by 42.2 per cent and monetary bills and Islamic certificates of deposit by 0.5 per cent. Meanwhile, reserve account increased by 37.3 per cent.

Foreign Assets: The total foreign assets of the Central Bank of the UAE exceeded the Dhs770 billion mark by the end of June for the first time in its history, according to the latest bank statistics, increasing by 0.5 per cent from Dhs766.73 billion in May to Dhs770.6 billion in June 2024, an increase equivalent to Dhs3.88 billion.

The central bank’s foreign assets increased year-on-year (YoY) by 30 per cent to Dhs592.11 billion in June 2023, an increase of about Dhs178.5 billion.

The Central Bank statistics attributed the rise in the volume of foreign assets to an increase in bank balances and deposits with banks abroad to Dhs533.86 billion, while foreign securities increased to Dhs179.72 billion, and other foreign assets rose to more than Dhs57 billion by the end of June.

The Central Bank stated that its foreign assets do not include its Reserve Tranche Position (RTP) and Special Drawing Rights (SDR) Holdings with the International Monetary Fund (IMF).

The balance sheet of the Central Bank of the UAE reached Dhs806.39 billion at the end of June, a YoY increase of 24.2 per cent compared to Dhs649.4 billion in June 2023, an increase of Dhs157 billion YoY.

According to the statistics, the central bank’s balance sheet distributed Dhs352.79 billion for cash and bank balances in June, along with investments of Dhs206.43 billion, Dhs208.78 billion for deposits, Dhs1.71 billion for loans and advances, and Dhs36.68 billion for other assets.

On the liabilities and capital side, the balance sheet distributed Dhs396.72 billion for current and deposit accounts, Dhs226.93 billion for monetary bills and Islamic certificates of deposit, Dhs145.36 billion for currency notes and coins issued, Dhs26.56 billion for capital and reserves, and Dhs10.82 billion for other liabilities.

WAM