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29 March 2024

UAE banking system is stable, says Central Bank Governor

Sultan bin Nasser Al Suwaidi, UAE Central Bank Governor with other officials at the Yas Viceroy Hotel on Tuesday (WAM)

Published
By WAM

Sultan bin Nasser Al Suwaidi, Governor of UAE Central Bank, said that the UAE banking system is stable and has a high adequacy in accordance with the standards of "the Basel 3 Committee."

Al Suwaidi was speaking in a meeting held on Tuesday afternoon at Yas Viceroy Hotel at Yas Island with about hundred journalists from 43 countries, who are currently visiting the UAE at the invitation of National Media Council (NMC) on the occasion of the 40th National Day anniversary.

He added that the total net assets of the allocations at the Central Bank, including cash, deposits and net receivables from the headquarters and branches abroad, other banks, investments, the total loans and advance reached until the end of last October, about a trillion and $659 billion and Dh800,000.

Al Suwaidi noted that the budget of the Central Bank soared to its highest level in more than 40 months, reaching Dh278.36bn at the end of May, against Dh199.77bn in corresponding period in 2010, at an annual growth rate of 21.6 per cent.

The Governor stressed that the banks operating in the country enjoy a solid capital and reserves, which continued to rise during the third quarter of 2011, helping the them to get a high percentage of capital adequacy, which amounted to 20.7 per cent by end-March.

He explained that this figure exceeds the target set by the Central Bank, which is 12 per cent from June 2010 to help the banks bear the burden of building additional provisions against loans and advances. In his response to a question on joining of the UAE to the GCC monetary union, Al Suwaidi said that the UAE will remain outside the Union.

Regarding the GCC currency, he said that there are things in the economic integration that must be achieved, and the monetary union should culminate the economic integration, citing the existence of a successful economic blocs in the world, such as the Asean countries without having a monetary union.

He denied that the UAE banks have exposure to European banks, indicating that 20 per cent of the UAE trade comes from Europe, "but we do not have any exposures, and did not take any special measures." "We rely on the monetary policy, tools and systems which include the so called precautionary settings, and we have complete coverage of money in the banking sector, especially loans and advances, investments and demand deposits, savings deposits and bank reserves of capital. This covers all the needs of banks in the UAE," Al Suwaidi said.

He underlined that the UAE will not change dirham peg to dollar, expecting that the national economy will grow by three per cent, while the UAE achieved the economic growth by 2.5 per cent in 2010 as the Gross Domestic Product exceeded Dh1.28trn last year.

Al Suwaidi refuted that the euro zone has requested assistance from the UAE to meet the liquidity crisis in some European countries.

In his response to a question about the commitment of the Central Bank regarding the sanctions against Syria, he said, "this is under the jurisdiction of the Ministry of Foreign Affairs and in accordance with the resolutions of the UN Security Council".

On the sanctions imposed on Iran, he said, "They are international sanctions and we abide by them because they were issued by the United Nations." He added that "the UAE was in the forefront of countries that have implemented the international resolutions, and works in coordination with the US authorities and European Union in accordance with the known standards, and we take the general guidelines in this regard from the United Nations."