UAE: Central Bank Supports Economy

UAE

The Central Bank of the UAE on Saturday said local banks are well-capitalised and have significant voluntary capital buffers in order to support the local economy impacted by coronavirus.

While announcing a Dh100 billion stimulus package to ensure ample liquidity in the local banking sector and support the economy, the central bank said the Targeted Economic Support Scheme consists of Dh50 billion from central bank funds through collateralised loans at zero cost to all banks operating in the UAE and Dh50 billion funds freed up from banks' capital buffers.

Given that the World Health Organisation has declared Covid-19 as a global pandemic, these measures are aimed at helping retail and corporate customers in tough times and will enter into force with immediate effect.

All banks will be allowed to tap into a maximum of 60 per cent of the capital conservation buffer and, additionally, banks designated as systemically important by the central bank will be able to use 100 per cent of their additional capital buffer for systemic importance.