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Fiscal buffers easing external shocks: UAE cbank

ABU DHABI, November 25, 2015

The build-up of large fiscal buffers over recent years, in addition to a highly liquid and well-capitalised banking sector, have reduced the potential impacts of negative external shocks, said the governor of UAE’s Central Bank.

Monitoring and anticipating possible risks, while building on the lessons learned from the financial crisis, remains a priority for the bank, added Mubarak Al Mansouri, speaking during a wide-ranging interview he gave to the global publishing, research and consultancy firm Oxford Business Group (OBG).

Al Mansouri said the Central Bank’s strategies had been instrumental in cushioning the blow of lower oil prices and an appreciating US dollar on the domestic economy.

“This is reflected in recent IMF forecasts, which predict non-hydrocarbon growth of 3.5 per cent in 2015,” he said.

The full interview with Al Mansouri will appear in The Report: Abu Dhabi 2016, OBG’s forthcoming report on the emirate’s economy. The publication will contain a detailed, sector-by-sector guide for investors, alongside contributions from leading personalities including a number of prominent members of the Abu Dhabi Executive Council.

Al Mansouri told Oxford Business Group that the Central Bank had moved to strengthen its liquidity management framework as a means of supporting banks and maintaining sustainable credit growth in a challenging global economic climate.

Introduced last year, the Interim Marginal Lending Facility (IMLF) provides banks with access to short-term Dirham funding by pledging eligible securities as collateral, while a newer Islamic equivalent, known as the Collateralized Murabaha Facility (CMF), puts Islamic banks on an equal footing with conventional lenders, he explained.

Al Mansouri described Islamic banking as “a very important subsector of the UAE banking industry”. Moreover, the Islamic bank model of risk sharing, he noted, was “well suited” for boosting lending in support of small business development, which remained a key national target.

The Report: Abu Dhabi 2016 will be a vital guide to the many facets of the emirate, including its macroeconomics, infrastructure, banking and other sectoral developments, a statement said, adding that the publication will be available in print or online. – TradeArabia News Service




Tags: Oxford Business Group | UAE central bank |

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