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29 March 2024

High oil boosts UAE's credit status

Published
By Staff

A surge in oil exports more than quadrupled the UAE’s current account surplus and this sharply boosted the central bank’s foreign assets and contributed to a large increase in the country’s creditor status, official data showed.

The surge in the central bank’s foreign assets allied with a similar rise in the foreign assets of the country’s 51 banks to boost the net foreign assets of the UAE’s financial system by nearly Dh72 billion at the end of April.

New figures by the central bank showed the net foreign assets, the difference between foreign assets and foreign liabilities, climbed to one of their highest levels of around Dh164.6 billion at the end of April from Dh92.4 billion at the end of 2011. They had already swelled by around Dh14 billion through 2011.

The report showed the combined foreign assets of the central bank and the 51 banks grew to nearly Dh450.4 billion at the end of April from Dh382.4 billion at the end of 2011 and Dh350 billion at the end of 2010.

Their foreign liabilities slipped to about Dh285.7 billion at the end of April from Dh289.4 billion at the end of 2011 after rising from Dh272.3 billion at the end of 2011, the central bank said in its April statistics bulletin.

A breakdown showed the total foreign assets of the banks surged to around Dh297.7 billion at the end of April from Dh248.8 billion at the end of 2011 and nearly Dh233 billion at the end of 2010.

The central bank’s foreign assets also soared to Dh151.2 billion from about Dh137.8 billion at the end of 2011 and Dh132.2 billion at the end of 2010.

The central bank said the rise followed a sharp increase in the country’s current account surplus due to higher oil revenue.

“The overall balance of payments remained negative at Dh22.5 billion in 2009… it then became positive in 2010 and 2011, standing at Dh 26.9 billion and Dh16.6 billion respectively, thereby adding to the net foreign assets of the Central Bank.”

The report also reported a surge in the current account surplus to nearly Dh112.6 billion in 2011 from Dh26.5 billion in 2010. It said the rise was a result of a sharp increase in the country’s hydrocarbon income to a record high of around Dh409.8 billion last year compared with 274.1 billion in 2010.