UAE Launches Banking Support Measures Amid Middle East Crisis
Approved by the central bank’s board on Tuesday, the initiative is intended to help the banking sector navigate what the regulator called “exceptional global and regional circumstances.” The measures are designed to ensure banks can continue extending credit to the UAE economy while mitigating financial pressures.
Under the plan, banks will gain expanded access to liquidity and temporary flexibility to use capital buffers. The package is backed by the central bank’s foreign exchange reserves, which exceed 1 trillion dirhams (over $272 billion).
The package allows banks to access up to 30% of their cash reserve requirements and provides term liquidity facilities in both UAE dirhams and US dollars. Additional measures include temporary relief from liquidity and stable funding ratios, along with the temporary release of the countercyclical capital buffer and the capital conservation buffer.
The move comes amid warnings from analysts that Gulf banks could experience heightened pressure if the regional conflict intensifies. According to reports, in a severe escalation scenario, domestic deposit outflows could reach as much as $307 billion, though no significant withdrawals have been observed so far.
The CBUAE noted that liquidity in the sector remains strong, with UAE banks holding nearly $250 billion in total liquidity at the central bank, including net eligible assets for central bank operations. Of that amount, reserve balances alone exceed $109 billion, highlighting the sector’s robust capacity to manage potential shocks.
Legal Disclaimer:
MENAFN provides the
information “as is” without warranty of any kind. We do not accept
any responsibility or liability for the accuracy, content, images,
videos, licenses, completeness, legality, or reliability of the information
contained in this article. If you have any complaints or copyright
issues related to this article, kindly contact the provider above.
Legal Disclaimer:
EIN Presswire provides this news content "as is" without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the author above.
