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19 March 2024

Central Bank deposits double

Published
By Staff

The UAE Central Bank more than doubled its deposits with other banks in the first eight months of 2013 while its “held-to-maturity-investments” dipped by more than two per cent following a sharp rise in the previous months.

The decline in investments did not affect the Central Bank’s overall assets, which swelled by nearly 7.2 per cent to reach one of their highest levels at the end of August.

Deposits with other banks hit an all time high of around Dh94.6 billion at the end of August compared with Dh43.6 billion at the end of 2012, an increase of around 117 per cent in just eight months, the Central Bank said in its latest budget report.

Held-to-maturity-investments, which account for the bulk of the Central Bank’s assets, slumped by 2.6 per cent to nearly Dh180.3 billion from Dh185.1 billion in the same period. The report showed most of the decline was during April as they tumbled by nearly Dh17 billion from their level of Dh175 billion at the end of March.

Month-to-month, the investments recorded one of their highest increases as they surged by around Dh15 billion in August from Dh165 billion in July.

“Other assets” dived by 83 per cent to Dh1.22 billion at the end of August from Dh7.48 billion at the end of 2012 while cash and bank balances plummeted by 82 per cent toDh4.48 billion from Dh25.37 billion in the same period.

In a recent report detailing its investment policy, the Central Bank said it focuses on diversification of markets and tools as well as safe and profitable instruments, mainly held-to-maturity investments, which are non-derivative financial assets with fixed or determinable payments and fixed maturities

Held-to-maturity investments are measured at amortized cost, using the effective interest rate method.  As they are reported at amortized cost, they are not affected by swings in the financial markets.

In a statement after a board meeting early this year, the Central Bank put its net profits at around Dh3.7 billion in 2012 and said earnings could slip to nearly Dhthree billion in 2013. The net income in 2012 was almost equivalent to the 2011 earnings.