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- Dubai 05:23 06:41 12:10 15:09 17:32 18:50
A sharp rise in the banks' foreign assets coupled with lower foreign liabilities widened the UAE's creditor position, with its net foreign assets leaping by over 100 per cent in 2009, Central Bank data showed.
After climbing to a record high at the end of 2007, the combined net foreign assets of banks and the Central Bank dipped to one of their lowest levels by 2008 end before recovering through 2009, the data showed.
From around Dh33.09 billion at the end of 2008, the country's net foreign assets, involving the difference between the combined foreign assets and foreign liabilities, leaped to nearly Dh69.6bn at the end of November 2009.
A breakdown showed the increase was a result of growth in the total foreign assets of the country's 24 national banks and 28 foreign units to around Dh219.6bn at the end of November 2009 from Dh203.3bn at the end of 2008. Foreign liabilities slumped to about Dh258.4bn from Dh282.5bn in the same period, the Central Bank said in its November bulletin.
The bulk of the drop in foreign liabilities was in deposits of foreign banks with the UAE-based banks as they dipped to nearly Dh106.5bn from Dh175.6bn.
Foreign liabilities have plunged over the past two years following a drive by banks abroad to withdraw their funds that they had poured into the UAE and other Gulf countries in anticipation of a revaluation of national currencies against the US dollar, to which most regional currencies are pegged.
From around Dh205.6bn at the end of 2007, the deposits of foreign banks with banks in the UAE tumbled to Dh175.6bn at the end of 2008. They plummeted to Dh125.03bn in August but stabilised in September. They then fell to around Dh113.9bn in October and Dh106bn in November.
The data showed the UAE's net foreign assets soared despite a decline in the Central Bank's foreign assets from around Dh113bn at the end of 2008 to Dh108.4bn at the end of November 2009. The Central Bank's foreign assets had climbed to an all time high of Dh285.6bn by end of 2007 before they were cut to meet domestic commitments, including providing liquidity to local banks after the global fiscal crisis.
The high level of those assets boosted the UAE's net foreign assets to a record Dh160.3bn at the end of 2007.
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