UAE Central Bank’s emergency package nears $2bn

Loan deferrals under the Central Bank of the UAE’s emergency measures have climbed to AED6.2 billion ($1.7 billion) since it launched the package in March in response to the Iran conflict.

Over 60,000 individuals, 4,300 small and medium-sized enterprises and almost 500 corporates have benefited.

The transport sector has received most help, followed by hospitality and entertainment.

Central Bank data show the banking sector grew from March 1 to May 1, with assets rising 2.1 percent, loans 3.2 percent and deposits 1.9 percent. The monetary base cover ratio reached 115.3 percent.

The support mechanism includes deferring repayment instalments for up to six months without classifying them as a default, suspending interest and fees on affected facilities and maintaining credit financing for priority economic sectors.

No minimum loan size is required to benefit from the package.

In March Sheikh Mansour bin Zayed Al Nahyan, chairman of the Central Bank, said its “precautionary policies and proactive frameworks have consistently demonstrated their effectiveness in promoting the resilience and preparedness of the financial and banking sector, while ensuring monetary and financial stability”.

Further reading:

• UAE central bank unveils package to support lenders in Iran war
• Drop in UAE monetary supply poses challenge for banks
• The logic behind the UAE’s pursuit of US currency swaps

Dubai also offered incentives worth AED1 billion to ease financial pressure on businesses and individuals affected by the Iran war.

S&P Global Ratings said Gulf banks could call upon $630 billion in cash, liquid investments and Central Bank deposits if a prolonged war with Iran sparked widespread customer withdrawals.